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Technical Outlook

Equity benchmarks concluded choppy session on a flat note despite firm global cues. The Nifty settled Tuesday’s session at 18044, down 24 points. In the coming session, the index is likely to witness gap down opening tracking subdued global cues. We expect index to stage a pullback post gap down opening. Hence, use dip towards 17920-17955 for creating long position for target of 18035. Key point to highlight is that, over past six sessions index has retraced 61.8% of preceding three sessions decline (18342-17613).

The lack of faster retracement on either side signifies prolonged consolidation in the range of 18200-17700 amid stock specific action that would make market healthy after 20% rally seen over past over past three months (15513-18604). Over past 18 months buy on dips strategy has worked well as on multiple occasions higher base formation around 50 days EMA offered a fresh entry opportunity. Hence, ongoing corrective phase around 50 days EMA should not be construed as negative, instead dips should be capitalised on to accumulate quality stocks

Nifty Weekly Chart

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