Nifty may head to 16,100 in coming weeks, Bank Nifty positive; Infosys, Axis Bank stocks top bets

By Dharmesh Shah

In the week gone by equity benchmarks concluded on a subdued note. The Nifty dropped 0.9% to settle the week at 15722. Broader markets relatively outperformed as Nifty midcap and small cap gained 0.5% and 2%, respectively. Sectorally, Pharma, FMCG, PSU Bank outshone while Financials and metal took a breather

The small cap index continued to outperform the benchmark as it scaled to fresh all-time high after a couple of weeks consolidationBank Nifty Outlook

– The Index settled 1.5% lower for the week after a choppy and stock specific play. The weekly price action resulted in a bear candle indicating extended consolidation post early June swing high (35810) while forming higher lows amid elevated buying demand– Going ahead, we expect the index to trade with positive bias and head towards 36200 levels in the coming weeks as it is the confluence of the 80% retracement of the February – April 2021 decline (37708-30405) that coincide with price parity of late April swing (30405-34287) as projected from the recent trough of 32115– On a smaller time frame the index has witnessed a shallow retracement as it has retraced just 50% of its May rally (32115-35810) over past four weeks.

On a smaller time frame the index has witnessed a shallow retracement as it has retraced just 50% of its May rally (32115-35810) over past four weeks.

– Key observation is price action has been contracting over past few sessions suggesting that breakout from this consolidation is approaching. We expect index to breakout on the higher side given shallow retracement and robust price structure– The formation of higher high-low in the weekly time frame gives us confident to revise the support base higher towards 34200 being the confluence of the following technical observations:a. The 80% retracement of the last five sessions up move (33908-35576) placed at 34265 levelsb. The value of the rising demand line joining lows of April 2021 and May 2021 is placed around 34450c. The rising 50 days EMA is also placed at 34300 levels

(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