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Technical Outlook

Equity benchmarks extended losses over third consecutive session tracking weak global cues. The Nifty drifted 257 points or 1.5% down to settle Tuesday’s session at 16984. In the coming session, index is likely to open on a flat to positive note amid mixed global cues. We expect the Nifty to hold 200 days EMA and form a base. Hence, use intraday dip towards 16878-16905 for creating long position for the target of 16993

The lack of faster retracement on either side signifies prolongation of consolidation in 17500-16700 range ahead of US inflation data, wherein stock specific action would prevail onset of earning season. Over past three sessions index has retraced 61.8% of past four sessions up move (16748-17438), highlighting healthy retracement. Thus, extended breather from hereon should not be construed as negative. Instead, dip should be used as a buying opportunity to ride the next leg of up move towards 17500. Sustainability above 17500 would lead to acceleration of upward momentum.

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