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Technical Outlook

Equity benchmarks staged a strong comeback tracking global recovery in equity markets. The Nifty settled Tuesday's session at 17274 up 387 points or 2.3%. In the coming session, index is likely to witness gap up opening tracking strong pullback in global equities over past two sessions. We expect, index to trade with a positive bias while maintaining higher high-low formation amid weekly expiry. Thus, cool off towards 17338-17372 should be used for creating long position for the target of 17456

Going ahead, sustainability above 17500 would lead to extension of next leg of up move towards 17800 in coming weeks as it is 80% retracement of September decline (18096-16748) placed at 17826. On expected lines supportive efforts emerged from key support of 16700 amid oversold conditions. Thus any cool off from hereon towards 16900 due to global volatility should be used as incremental buying opportunity. Structurally, over the past five weeks’ index has retraced ~38.2% of preceding nine week’s rally (15185- 18000) while absorbing global volatility, signifying healthy retracement amid relative outperformance against global peers.

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