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Technical Outlook

Equity benchmarks concluded volatile session on a subdued note weighed down by concerns over rising Covid cases globally. The Nifty ended the session at 18199, down 186 points or 1%. In the coming session, index is likely open on a positive note tracking recovery in global markets. We believe, Wednesday’s high of 18500 would act as immediate resistance. Hence, any pullback from here on towards 18378-18420 should be used to create intraday short positions for target of 18303

We expect, the index to prolong the ongoing corrective phase wherein strong support is placed at 17900. The Bank Nifty (which carries 37% weightage in Nifty) has closed below 20 days EMA and formed a lower high-low after 11 weeks’ rally, indicating extended correction. The past three week’s secondary correction (4%) in Nifty has hauled overbought conditions as weekly stochastic cooled off to 30 levels, indicating healthy retracement of past nine weeks 13% rally. Thus, extended dip from here on should be used to accumulate quality stocks. In the process, current week’s high of 18500 would act as key resistance in coming sessions

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