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Technical Outlook

IT stocks dragged the Nifty down on Monday while broader markets relatively outperformed. Nifty snapped nine session winning streak to settle at 17713, down 1%. IT was main dragger (-4.7%). In the coming session index likely to open on flat to negative note amid soft global cues. We expect the index to consolidate with stock specific action. Hence use intraday dips in Nifty April future towards 17675-17710 for creating long position with a target of 16793, maintain a stoploss at 17639.

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 over few sessions. 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 continue with its positive momentum and witness a 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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