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Technical Outlook

Equity benchmarks concluded weekly derivative expiry session on a subdued note amid elevated global volatility. Meanwhile, Sensex clocked a fresh all time high and surpassed 56000 during the session. The Nifty settled Wednesday’s session at 16569, down 0.3%. In the coming session, the index is likely to witness a gap down opening tracking weak global cues. We expect intraday pullback to remain short lived. Hence use intraday pullback towards 16460-16485 to create short position for target of 16373.

Key point to highlight is that over past three weeks’ index has rallied 1188 points that hauled weekly stochastic oscillator in overbought territory (at 92), indicating couple of days’ breather from here on cannot be ruled out. However, such breather should be capitalised to accumulate quality stocks as we believe, strong support is placed at 16100 levels. We believe, breather from hereon would make market healthy and pave the way towards 16900 in coming month as it is 161.8% extension of mid-June rally (15450-15962) projected from July high of 15962.

Nifty Daily Chart

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