Equity benchmarks started the truncated week on a subdued note tracking global volatile cues - ICICI Direct
Technical Outlook
Equity benchmarks started the truncated week on a subdued note tracking global volatile cues. The Nifty drifted over 200 points or 1.2% to settle Monday’s session at 16887. In the coming session, index is likely to witness gap up opening tracking strong pullback in global equities. We expect index to sustain above the psychological mark of 17000. Thus, cool off towards 17022-17052 should be used for creating long position for the target of 17138
The index has retraced less than 80% of Friday’s sharp up move. Going ahead, follow through strength to weekly hammer like candle would be required to extend the technical pullback towards 17300, else extended consolidation in the 17000-16600 range in the vicinity of 200 days EMA. In the process, declines should be utilised to accumulate quality stocks as strong support is placed at 16700-16600 range which we expect to hold amid ongoing volatility. Over past three weeks’ index has corrected 7.5% which hauled stochastic oscillator near oversold territory, indicating impending pullback.
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