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Technical Outlook

Indian The equity benchmarks extended gains for third week in a row as rate sensitives led the rally amid lower inflation data. Nifty closed the week at 17828 levels up 1.3%. In the coming session, index is likely to open on a negative note amid mixed global cues. Nifty after 1000-point rally over past eight sessions has approached overbought territory. Hence corrective consolidation is likely in today’s session amid stock specific action. Hence, after a negative opening use intraday pullback towards 17840-17872 in April future for creating short position for target of 17753, maintain a stoploss at 17909.

Post Nifty’s 1000-point rally over past eight sessions, led it to short term overbought trajectory with daily stochastic reading of 96, thus raising probability of a temporary breather at current levels. Post this we expect Nifty to resume uptrend towards 18100 in coming weeks with key support now being placed at 17500 levels. Use dips as buying opportunity amid onset of earnings season. We expect broader markets to witness catch up activity as Nifty midcap and small cap indices have resolved out of four month falling channel indicating end of corrective phase.

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