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Technical Outlook

Equity benchmarks extended corrective phase over second consecutive week. The Nifty settled the week at 14507, down 1.6%. In the coming session, index is likely to witness gap up opening tracking positive global cues. We expect index to trade with a positive bias maintaining higher highlow formation. Hence, use intraday dip towards 14690-14715 to create long for target of 14799

Key point to highlight is that, despite host of negative news around rising COVID-19 cases, index has managed to close above key support of 14400 (on a weekly closing basis), indicating inherent strength. Since March 2020, Nifty has maintained a rhythm of not correcting for more than average 9% and time wise correction has not exceeded for more than 3 consecutive weeks. We expect this rhythm to be maintained. In current scenario, Nifty has already corrected 7.5% from all time high of 15432. Therefore, price wise damage from hereon will be limited. Hence, dips should be capitalised on to construct portfolio from medium term perspective.

Nifty Weekly Chart

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