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Technical Outlook

Equity benchmarks extended corrective bias over third consecutive session tracking volatile global cues ahead of inflation data. The Nifty ended the choppy session at 17858, down 38 points or 0.2%. In the coming session, index is likely to open on a positive note tracking firm global cues post outcome of inflation data. We expect, index to hold key support of 17800 and trade with a positive bias. Thus, intraday dip towards 17780-17802 should be used to create intraday long positions for target of 17893

The lack of follow through strength signifies prolonging of the consolidation in the 18300- 17800 range. In the process, stock specific action would prevail amid start of earning season. The ongoing consolidation has hauled weekly stochastic oscillator in oversold territory (currently placed at 17) and helped the index to form a higher base. Going ahead, formation of higher high-low on the weekly chart would confirm the revival of upward momentum, else there would be extended consolidation. Thus, dips should be capitalised on to accumulate quality stocks as we believe extended breather from here on would find its feet around key support of 17500.

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