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Technical Outlook

Equity benchmark extended gains over second consecutive session and closed above the psychological mark of 16000. The Nifty settled at 16131, up 246 points or 1.6%. In the coming session, the index is likely to open on a positive note tracking buoyant global cues. We expect index to endure upward momentum while maintaining higher high-low. Hence, use intraday dips towards 16160-16185 to create long for target of 16273.

The index has witnessed a faster pace of retracement as Nifty entirely retraced past seven sessions decline (15962-15513) in just four sessions backed by multi sector participation. We believe, rejuvenated traction in BFSI, auto, consumption and outperformance in IT, metal, Infra would drive index towards our earmarked target of 16300 in coming weeks as cumulatively it carries more than 60% weightage in Nifty. Our target of 16300 is based on:

a) implied target of recent consolidation (15950-15500) breakout is placed at 16350

b) 161.8% external retracement of mid-July decline (15962-15513), placed at 16240

Nifty Daily Chart

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