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Technical Outlook

Equity benchmarks concluded monthly expiry session on a negative note tracking weak global cues. The Nifty ended Thursday’s session at 16818, down 40 points or 0.2%. In the coming session, index is likely to witness open on a negative note tracking subdued global cues. We expect index to stage a pullback after initial decline in the vicinity of 52 weeks EMA. Hence, use dip towards 16675-16730 for creating long position for the target of 16791

The lack of follow through strength signifies prolonging of corrective bias ahead of RBI policy. Therefore, a decisive close above previous session’s high of 17026 would be the prerequisite to pause the ongoing downward momentum else corrective bias will continue. Key point to highlight is that, past three week’s 1300 points decline hauled daily and weekly stochastic oscillator in oversold territory with a reading of 6 and 18, respectively, indicating possibility of technical pullback from oversold conditions cannot be ruled out. We expect supportive efforts to emerge around key support zone of 16800-16700 amid elevated global volatility. Meanwhile, 17300 would continue to act as immediate hurdle.

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