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Technical Outlook

Equity benchmarks snapped three weeks winning streak and settled the week on a negative note tracking weak global cues. The Nifty ended the week at 16050, down 1%. In the coming session, index is likely to open gap up tracking bounce in global equities. We expect the index to trade with positive bias while forming higher high-low. Hence, after a positive opening use intraday dip towards 16130-16162 for creating long position for the target of 16247

The index has undergone healthy retracement as it retraced 38.2% of >1000 points rally seen during past 3 weeks (15183- 15661) that helped index to cool off the daily stochastic oscillator cooled off to 20 levels. In the process, index managed to hold the breakout area of two months down trend line. Going ahead, we reiterate our positive stance on markets and expect Nifty to gradually head towards 16600 in coming weeks. Meanwhile, bouts of volatility owing to volatile global cues cannot be ruled out. However, dips from here on should be capitalised on as buying opportunity as we believe strong support is placed at 15500.

Nifty Daily Chart

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