Nifty looks set to hit 17,200, Bank Nifty may hit new high of 37,700 in coming month; HDFC, RIL top bets

Going ahead, we expect the index after the recent healthy base formation to breakout above the upper band of the range (36300) and head towards 37700 levels in the coming month. Image: Reuters

By Dharmesh Shah

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Equity benchmarks regained upward momentum and witnessed the highest weekly closing on Nifty at 16705, up 1.5%, last week. The broader market indices snapped past two weeks’ corrective phase and relatively outperformed the benchmark as Nifty midcap, small cap rose 2%, each. Sectorally, IT, metal, financials outshone while auto took a breather

Nifty technical outlook

– The Nifty started the week on a buoyant note and gradually scaled to a fresh all time high of 16713. The weekly price action formed a small bull candle carrying higher high-low, indicating resumption of upward momentum after last week’s breather. In the process, on expected lines broader market indices have maintained the rhythm of maturity of price/time wise correction

Bank Nifty Outlook

– The Nifty Bank witnessed a rebound after previous week decline and closed the week higher by more than 1.5%. The weekly price action formed a high wave candle with a long lower shadow signaling strong support at lower levels around 34800-34500 levels
– Going ahead, we expect the index after the recent healthy base formation to breakout above the upper band of the range (36300) and head towards 37700 levels in the coming month as it is the confluence of the measuring implication of the recent range (36300-34800) and the previous all-time high of February 2021
– In the smaller time frame the index in the last 15 sessions has retraced just 61.8% of its previous five sessions up move (34115-36219). A shallow retracement highlights a higher base formation and a positive price structure

(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 22/04/2021 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