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Technical Outlook

The equity benchmark kick started the week on a buoyant note tracking firm Asian cues. The Nifty concluded Monday’s session at 18314, up 111 points or 0.6%. In the coming session, index is likely to open on a flat to positive note tracking mixed global cues. We expect index to trade with a positive bias while maintaining higher high-low formation. Hence, use intraday dip in May future towards 18290-18322 to create intraday long positions for target of 18407 with a stoploss of 18253.

Going ahead, we expect Nifty to resolve higher and head towards upper band of consolidation placed at 18500 in coming weeks wherein small caps to relatively outperform the benchmark. In the process, bouts of volatility owing to monthly expiry week coupled with global volatility can not be ruled out. Thus, buy on dips would continue to be the prudent strategy to adopt. We expect Nifty small cap space to witness catch up activity as many small cap stocks which are not part of small cap index are coming out of large consolidations. The Nifty midcap index is just 2% away from its All Time High whereas Nifty small cap index is still 17% away.

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