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Technical Outlook

Equity benchmarks extended its record setting spree over second consecutive week as Nifty scaled to new highs of 16543. Nifty settled the week at 16529, up 1.8%. In the coming session, the index is likely to open on a flat note tracking muted Asian cues. We expect index to trade with positive bias and endure its higher high-low formation. Hence use intraday dips towards 16445-16470 to create long for target of 16557.

The follow through strength post two months’ consolidation breakout backed by leadership in banking, IT and Telecom, metals signifies inherent strength that makes us confident to revise our target to 16900 for coming month as it is 161.8% extension of mid-June rally (15450-15962) projected from July high of 15962. In the process, bouts of volatility at higher levels after recent strong run up would offer incremental buying opportunity as buying on declines strategy has worked well over past 15 months. In the upcoming truncated week, we expect index to head towards our earmarked target of 16600.

Nifty Daily Chart

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