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Technical Outlook

Equity benchmarks started the week on a subdued note tracking mixed global cues. The Nifty plunged 285 points or 1.65% to settle Mondays session at 16912. In the coming session, the index is likely to open on a positive note tracking firm global cues. However, we expect volatility to remain high owing to escalating global volatility. Hence, use dips towards 16905-16935 for creating long position for target of 17022.

Going ahead, we expect prolongation of consolidation in the range of 17500—16800 amid stock specific action that would help index to form a higher base around 100 days EMA. Thus, extended breather from hereon should not be construed as negative instead dips should be capitalised to accumulate quality stocks as we expect buying demand to emerge at lower band of consolidation placed around 16800-16700 zone. During last week’s pullback index failed to sustain above 50 days EMA which will not act as Immediate resistance as it is confluence of: a) 50% retracement of recent decline (18210-16782) at 17496. b) Last week’s high is placed at 17490.

Nifty Weekly Chart

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