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Technical Outlook

Equity benchmarks extended gains over second consecutive week as index scaled to fresh life time high of 15455. Nifty settled the week at 15436, up 1.7%. In the coming session, the index is likely to open on a subdued note tracking muted Asian cues. We expect Nifty futures to trade with a positive bias while maintaining higher high-low formation. Hence, use intraday dip towards 15385- 15412 to create long for target of 15498.

We expect, Nifty to resolve higher and head towards our revised target of 15700 in June, as it is 123.6% external retracement of February-April correction (15432-14151). Key point to highlight is that, index has entirely retraced past 10 weeks corrective move (15432-14151) in just five weeks. Faster pace of retracement signifies structural improvement that augurs well for next leg of up move. Meanwhile, the current up move (1050 points) off May low of 14416 is larger in magnitude compared to last two up moves of ~900 points seen in last three months, indicating robust price structure.

Nifty Daily Chart

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