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Technical Outlook

Equity benchmarks taken a breather after three sessions up move amid muted global cues. The Nifty ended the choppy session tad below Friday’s close, at 16216. In the coming session, index is likely to open on a negative note tracking weak global cues. Past three weeks up move hauled daily stochastic in overbought territory at 93, indicating possibility of temporary breather cannot be ruled out. Hence after a negative opening use intraday pullback towards 16185-16215 for creating short position for the target of 16101

Going ahead, we maintain our positive stance and expect Nifty to gradually head towards 16600 in coming weeks. However, the move towards 16600 will not be in a linear manner as bouts of volatility owing to overbought condition amid global uncertainty can not be ruled out. Thus, any dip towards 15800-15700 should be used as incremental buying opportunity as we believe strong support for the Nifty is placed at July low of 15500. current pullback is qualitatively better as compared with earlier pull backs since April in terms of market breadth (measured by percentage of stocks above 50 DMA (50%) strongest in two months indicating broad based participation)

Nifty Daily Chart

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