By Dharmesh Shah
The NSE Nifty 50 staged a strong comeback of 1100 points despite a gap down opening (16245-15870) for the week. As a result, weekly price action formed a strong bull candle, highlighting a pause in downward momentum as buying demand emerged from key support of 15800 amid oversold condition. Further, a major victory in the state election boosted the market sentiment. The index has maintained the rhythm of bouncing back from the vicinity of 52 weeks EMA after a sharp decline, highlighting inherent strength that augurs well for extended pullback.
Going ahead, the immediate hurdle for the Nifty is placed at 16800 levels. We expect the elevated buying demand would eventually help the index to surpass the 16800 mark that would fuel the extension of ongoing pullback towards 17200 in the coming month. In the process, volatility would remain elevated owing to ongoing geopolitical issues. Hence, any retracement towards 16200-16300 of last week’s sharp pullback 1100 points should be capitalized asincremental buying opportunity in the upcoming truncated week
Structurally, IT and Metal to outperform while beaten down BFSI, Auto, Consumer discretionary would offer stock specific opportunities Our preferred large cap picks are Infosys, Reliance Industries Ltd (RIL), Tata Steel, State Bank of India (SBI), Sun Pharma, while in Midcaps we like Amber Enterprises, Bharat Electronics, Chambal Fertiliser, Eclerx, Trent, Graphite, Inox Leisure, Dhampur Sugar.
On the downside, key support for the Nifty is placed at 15900 which we expect to hold amid ongoing global volatility as it is 80% retracement of ongoing up move (15671-16757), placed at 15888. The broader market indices have taken a breather after four consecutive weeks decline and approached in the vicinity of 52 week EMA. We expect, the Nifty midcap and small cap indices to form a base around 52 weeks EMA in coming weeks that would set the stage for extended pullback
Nifty Chart
Bank Nifty Outlook
The Bank Nifty snapped a four week losing streak aided by a cool off in crude oil prices to recover more than 3000 points from the week’s low (32155). However, profit booking at higher levels kept gains in check as the index closed the week marginally higher by 0.4%. The weekly price action formed a sizable bull candle with long shadows in either direction highlighting intraweek volatility and strong support at lower levels around 32500 levels.
In the coming truncated week dips towards 33400-33600 (being the last Thursday bullish gap area and 61.8% retracement of the last week pullback) should be used as an incremental buying opportunity, as we expect the index to trade with positive bias and gradually head higher towards 36600 levels in the coming weeks being the 61.8% retracement of the previous major decline (39424-32155)
Index has strong support around 32500 levels being the confluence of the following technical observations a) 80% retracement of the previous major rally of April 2021-October 2021 (30405-41829) placed at 32600; b) previous major breakout area of February 2021 is also placed around 32500 levels.
Among the oscillators the weekly stochastic is placed near the oversold territory with a reading 23, thus supports pullback in the index in the coming weeks
Dharmesh Shah is the Head – Technical at ICICI Direct. Please consult your financial advisor before investing.)
ICICI Securities Limited is a SEBI registered Research Analyst having registration no. INH000000990. It is confirmed that the Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 21/01/2022 or have no other financial interest and do not have any material conflict of interest. I-Sec or its associates might have received any compensation towards merchant banking/ broking services from the subject companies mentioned as clients in preceding 12 months.
Tags: 上海千花约会验证AF, 上海花千坊1314DFC, 上海龙凤会FF, 海口兼职TZ