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Technical Outlook

Equity benchmarks recouped intraweek losses tracking global recovery and settled the volatile week on a flat note. Nifty ended the week at 17004, up 0.3%. In the coming session, the index is likely to open on a flat note tracking muted global cues. We expect elevated buying demand to emerge from Friday’s low around 16910. Hence use dip towards 16890-16920 for creating long position for target of 17009. Going ahead, decisive close above 17200 backed by improvement in market breadth would lead to extension of pullback towards 17600. Failure to do so would lead to prolonged consolidation amid stock specific action in the broader range of (17200-16600) that would set the stage for next leg of up move.

The index has approached the maturity of price-time wise correction. Price wise, index has maintained the rhythm of not correcting for more than 11% since May 2020. Time wise, the index has arrested secondary correction within nine weeks. In current scenario, index has corrected 11.8% over past nine weeks. Thus, any dip from here on should be capitalised to accumulate quality stocks

Nifty Weekly Chart

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