The Nifty witnessed a range bound activity wherein it oscillated within merely 200 points range

The Nifty witnessed a range bound activity wherein it oscillated within merely 200 points range throughout the week. The weekly price action formed a small bear candle carrying a higher high-low, indicating temporary breather as profit booking set in led by anxiety near all-time highs.

We expect Nifty to undergo healthy consolidation which will help to cool off the overbought condition (weekly stochastics placed at 95) formed due to past four week’s 9% rally and form a higher base above key support of 17800 mark which will eventually pave the way to challenge life highs of 18600 in coming weeks. Thus, extended breather from here on should be capitalised on as incremental buying opportunity. Our positive stance is further validated by following observations

Nifty Bank: 42437

The weekly price action formed a small bull candle with shadows in either direction signalling consolidation with positive bias after strong up move of more than 13 % in the last seven weeks

We expect the index to undergo healthy consolidation and form a higher base above the breakout area of 41500 after the recent strong up move which has led to weekly stochastic in overbought zone (92 ) . We believe dips should be used as an incremental buying opportunity for up move towards 43500 levels in the coming weeks being the 138 . 2 % external retracement of the recent breather (41840 - 37386 )