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Technical Outlook

Equity benchmarks extended breather amid lacklustre global cues. The Nifty ended the week at 17859, down 1.3%. In the coming session, index is likely to witness gap up opening tracking firm global cues. We expect, index to trade with a positive bias while forming higher high-low formation. Thus, intraday dip towards 18035-18065 should be used to create intraday long positions for target of 18148

Going ahead, we expect prolonging of consolidation in the 18300-17800 range wherein stock specific action to prevail onset of quarterly earnings. The ongoing consolidation has hauled weekly stochastic oscillator in oversold territory (current placed at 14) and helped the index to form a higher base. Consequently, a decisive close above 18300 would lead to resumption of directional uptrend. We maintain our overall structural positive stance as current consolidation is part of healthy retracement of October – November rally (16748-18888), with strong support being placed at 17500 levels. Further, a decisive close above 18300 would lead to extension of rally towards all time high of 18900 in coming month.

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