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Technical Outlook

Equity benchmarks continued its losing streak over sixth consecutive session tracking weak global cues coupled with Rupee depreciation. The Nifty settled volatile session at 16859, down 149 points or 0.9%. In the coming session, index is likely to witness gap up opening tracking strong pullback in global markets. We expect index to behave in tandem with its global peers. Hence, after initial up move use dip towards 16952-16982 for creating long position for the target of 17069

The formation of lower high-low signifies prolongation of corrective bias. Therefore, to pause the ongoing downward momentum index need to decisively close above previous session’s high of 17038, else continuance of corrective bias. Past three weeks 1275 points decline hauled daily and weekly stochastic oscillator in oversold territory with a reading of 4 and 16, respectively indicating possibility of technical pullback from oversold conditions cannot be ruled out. We expect supportive efforts to emerge around key support zone of 16700 amid elevated volatility ahead of Monthly expiry coupled with RBI policy. On the upside, 17500 would continue to act as immediate hurdle.

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