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Technical Outlook

Equity benchmarks extended gains over third consecutive week tracking global recovery. The Nifty ended the volatile week at 16584 up 1.4%. In the coming session, index is likely to open on a subdued note tracking muted global cues. We expect index to consolidate amid stock specific action. Hence, use intraday pullback towards 16650-16682 for creating short position for the target of 16563

Going ahead, Nifty holding 16400 post RBI policy outcome, would challenge 16800 and gradually head towards 17200 in the month of June. Key point to highlight during last week is that, throughout the week index managed to sustain above the earlier range breakout zone of 16400 coincided with positive gap area, highlighting elevated buying demand emerging from immediate support of 16400 as per change of polarity concept. Thus, we believe, after past six sessions rally of 1000 points, a healthy retracement towards 16500- 16400 should be used as an incremental buying opportunity with focus on BFSI, IT, Auto and Capital goods.

Nifty Daily Chart

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