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Technical Outlook

Equity benchmarks extended gains over second consecutive session amid positive Asian cues. The Nifty ended Tuesday’s session at 15812, up 120 points or 0.8%. In the coming session, index is likely to open on a subdued note tracking muted global cues. We expect Nifty to trade with a positive bias amid rise in volatility. Hence, use intraday dip towards 15740-15765 to create long for target of 15853.

Going ahead, we reiterate our constructive stance and expect index to challenge the upper band of consolidation (15900) and eventually head towards 16100 in coming weeks. Over past four weeks, the market breadth has cooled off from the overbought conditions as currently ~80% components of Nifty 500 are trading above 50 days EMA compared to mid-June reading of 92%, highlighting healthy consolidation. In the process, Nifty has digested the rally in crude oil prices and global volatility, signifying robust price structure. We expect Nifty to maintain the rhythm of not correcting for more than three consecutive weeks in a row observed since April 2020.

Nifty Daily Chart

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