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FORMATION OF HIGHER HIGH-LOW SIGNIFIES PERSISTENCE OF POSITIVE MOMENTUM

Nifty:
The index witnessed a choppy session ahead of US inflation data as the Nifty oscillated in just 120 points range throughout the session. As a result, daily price action formed a small bear candle carrying higher higher-low, indicating continuance of positive bias amid stock specific action.
 
Formation of higher high-low signifies persistence of positive momentum. We expect the cool off in global inflation to boost market sentiment that makes us reiterate our constructive stance  and expect the Nifty to head towards 17900 in coming sessions as it is 80% retracement of entire decline off October 2021 to June low (18600-15200). In the process, the bouts of volatility owing to global cues cannot be ruled out. Thus, any temporary breather from here on  should not be construed as negative.
 
Nifty Bank: 
The daily price action formed a doji candle with a higher high-low signaling continuation of the overall positive momentum. The index is seen sustaining above 38000 levels. We expect the index to maintain positive bias and head towards February 2022 high of 39400 levels in the coming weeks. We expect the cool off in global inflation to boost market sentiment.
 
Bank Nifty has relatively outperformed the benchmark index during the market correction and the subsequent pullback as can be seen in the Bank Nifty/Nifty ratio chart. It has registered a breakout above the falling supply line joining highs since January 2021 highlighting strength and continuation of the outperformance
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