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Technical Outlook

Equity benchmarks extended losses over seventh consecutive session tracking escalating geopolitical issues. As a result, Nifty witnessed biggest single day decline of 815 points (or 4.8%) in two years. In the coming session, index is likely to witness gap up opening tracking strong global recovery. We expect index to pullback from oversold territory. Thus, use intraday dip towards 16310-16340 for creating long position for target of 16424

Going ahead, strong support for the Nifty is placed at 15800. Key point to highlight is that, past four months 13% correction from life high of 18600 hauled weekly stochastic oscillator in oversold territory (currently placed at 20), indicating possibility of impending pullback can not be ruled out. In the process, only a decisive close above 16800 would lead to pause in downward momentum. We believe 15800 would act as key support as it is confluence of a) The breakdown implication of past four weeks consolidation (17795-16810) is placed around 15800 b) 61.8% retracement of April-October rally (14150-18600) is placed around 15800

Nifty Daily Chart

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