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Technical Outlook

Equity benchmarks witnessed a roller coaster ride during the week amid volatile global cues. Nifty ended the truncated week at 16451, down 0.5%. In the coming session, the index is likely to open gap up amid pullback in global market. We expect index to trade with positive bias while holding above 16500 levels. Hence after a positive opening use intraday dips towards 16500- 16530 to create long for target of 16613.

Our structural positive stance on Nifty gradually heading to 16900 in coming month remains intact, however in coming expiry week, Nifty is expected to undergo healthy breather in 16100-16700 range. Key point to highlight is that the Nifty has rallied ~1200 points over past three weeks that hauled weekly stochastic oscillator in overbought territory (placed at 90), indicating couple of days’ breather from here on cannot be ruled out. However, such a breather would make market healthy. Thus, extended breather from here on should be capitalised to accumulate quality stocks as we believe strong support is placed at 16100 levels.

Nifty Weekly Chart

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