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Technical Outlook

Equity benchmarks endured their record setting spree despite subdued global cues. The Nifty settled Tuesday’s session at 16614, up 51 points or 0.3%. In the coming session, the index is likely to open on a positive note amid firm Asian cues. We expect index to trade with positive bias. However, volatility would remain high owing to weekly expiry session. Hence use intraday dips towards 16570-16705 to create long for target of 16687.

The formation of higher peak and trough backed by rejuvenated traction in IT pack signifies inherent strength that augurs well for extension of up move towards our revised target of 16900 in coming month. Key point to highlight is that the recently underperforming sectors like auto and cements have seen supportive efforts as buying demand emerged from oversold territory. We believe, bouts of volatility at higher levels after recent strong run up cannot be ruled out. However, such a breather should be capitalised as an incremental buying opportunity.

Nifty Daily Chart

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