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Technical Outlook

Equity benchmarks extended its winning streak over a third consecutive session despite muted global cues. The Nifty surged 42 points or 0.3% to settle Wednesday’s session at 15854. In the coming session, we expect index to trade with a positive bias amid rise in volatility owing to weekly derivative expiry. Hence, capitalise intraday dip towards 15815-15842 to create long for target of 15929

The rejuvenation of upward momentum in key heavy weight sectors (IT and BFSI which cumulatively carries 54% weightage in Nifty) signifies structural improvement which makes us confident that index would resolve out of past five weeks’ consolidation (15900- 15500) and propel the move toward 16100 in coming weeks. Key point to highlight is that, the IT index has seen faster pace of retracement on the smaller degree chart as it retraced past 2 weeks’ decline in just a single session. At the same time, the Bank nifty is on the verge of resolving out past six weeks’ consolidation. Hence, follow through traction in banking and IT would drive index higher.

Nifty Daily Chart

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