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Technical Outlook

Equity benchmarks started the truncated week on a buoyant note as Nifty clocked highest single day gain of 2.3% in last 2 months and settled Tuesday’s session at 14845. In the coming session, we expect index to trade with a positive bias while maintaining a higher high-low formation. After Tuesday’s sharp up move minor pullback can not be ruled out. Hence, use intraday dip towards 14845-14870 to create long for target of 14958.

Going ahead, we expect index to resolve higher and gradually retest life highs of 15430 in coming weeks. Key point to highlight is that, despite host of negative news index managed to hold 14400 twice during past two weeks (on a weekly closing basis), highlighting inherent strength. Subsequently, Tuesday’s swift up move helped index to decisively close above immediate resistance of 14800 backed by across sector traction, indicating broader market participation. Thus, traders can use volatility to their advantage to build long positions by accumulating quality large cap and midcap stocks.

Nifty Daily Chart

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