By Dharmesh Shah
NSE Nifty 50 index began the week with a damaging hole (17172-17009) and traded unstable guided by international cues. However supportive efforts emerged from the decrease band of consolidation (16800) on a few events which helped index to recoup intra-week losses. As a outcome, weekly value motion shaped an inside bar as Nifty oscillated inside final week’s buying and selling vary of 17415-16825, indicating uneven consolidation amid inventory particular motion.
Nifty has undergone a robust base formation above decrease band of consolidation coincided with 200 days EMA positioned round 16800 regardless of international volatility. In the method, anxiousness across the US Fed assembly final result is getting discounted. In the upcoming truncated week, we count on anxiousness to subside publish occasion and Nifty to carry the important thing assist of 16800 which is able to pave the way in which to move in direction of 17500. The ongoing consolidation has helped weekly stochastic oscillator to chill off the overbought situations, thereby making the market wholesome. Thus, dips needs to be capitalised to build up high quality shares in a staggered method. On the upside, 17500 would be the key degree to look at as a decisive transfer above 17500 would open the door for subsequent leg of up transfer.
Immediate resistance is positioned at 17500 is a confluence of:
A) Bearish hole recorded on April 18, 2022 positioned within the vary of (17475-17238)
B) 50% retracement of April decline (18114-16825)
Structurally, robust base at 16800 has been made as over previous 17 periods retraced solely 50% of 19 session rally regardless of elevated international volatility which we don’t count on to be breached in coming weeks as it’s confluence of:
a) 50% retracement of your entire March 2022
b) 200 days EMA positioned at 16860
Sectorally, we’re optimistic on BFSI, Auto, Metals, PSU. IT provides favorable threat reward amid oversold situations. Our most well-liked massive cap shares are State Bank of India (SBI), Bandhan Bank, Asian Paints, Tata Motors, Tata Consultancy Services (TCS), JSW Steel, Divi’s Labs whereas in midcaps we like Amber Enterprises, Apollo Tyres, Concor, Indian Hotels, Mahindra CIE, Gokaldas Exports, Persistent Systems, Phoenix Mills, NMDC.
The broader market indices are consolidating within the neighborhood of 200 days EMA. We imagine, base formation from hereon would set the stage for subsequent leg of up transfer amid ongoing Q4FY22 incomes season.
Bank Nifty Outlook
The Bank Nifty traded with excessive volatility because it oscillated in a 1200 factors vary to shut on a flat observe amid unstable international cues forward of the US FOMC assembly schedule subsequent week. The weekly value motion shaped a excessive wave candle with shadows in both course signaling pause after final three week’s corrective decline In the approaching truncated week, we count on the index to carry above the essential assist space of 35500-35000 and regularly head in direction of 37300 ranges within the coming weeks. The index has already taken 4 weeks to retrace simply 50% of its previous 4 weeks up transfer (32156-38765). A shallow retracement alerts a optimistic value construction and a better base formation.
On the upper aspect 37300 is prone to act as a significant hurdle being the confluence of the bearish hole space of 18th April & the 50% retracement of current decline (38765-35511). Structurally, the present corrective decline is shaping out as a retracement of a robust 20% rally from March 2022 lows (32156) which has helped the index to work off the overbought situations within the weekly timeframe.
We count on the index to carry above the robust assist space of 35500-35000 ranges as it’s confluence of
a) 61.8% retracement of your entire March 2022 up transfer (32155-38765) positioned at 34800 ranges
b) The rising 52 weeks EMA can also be positioned round 35500 ranges
c) The current swing low of second half of March 2022 can also be positioned round 35000 ranges/.
Among the oscillators the weekly stochastic has cooled off from the overbought territory and is presently positioned at a impartial studying of 42 signaling a pullback seemingly within the coming weeks
Dharmesh Shah is the Head – Technical at ICICI Direct. Please seek the advice of your monetary advisor earlier than investing.)
ICICI Securities Limited is a SEBI registered Research Analyst having registration no. INH000000990. It is confirmed that the Research Analyst or his kin or I-Sec wouldn’t have precise/helpful possession of 1% or extra securities of the topic firm, on the finish of 21/01/2022 or don’t have any different monetary curiosity and wouldn’t have any materials battle of curiosity. I-Sec or its associates may need acquired any compensation in direction of service provider banking/ broking providers from the topic firms talked about as shoppers in previous 12 months.
Source: www.financialexpress.com”