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Technical Outlook

The Nifty concluded truncated week on a flat note at 18069 tracking elevated global volatility. In the coming session, index is likely to open on a flat to positive note tracking positive global cues. We expect Nifty spot to find support around 18000 levels. Hence, use intraday dip in May future towards 18080- 18112 to create intraday long positions for target of 18197 with a stoploss of 18043.

Going ahead, follow through strength above 18300 (on a closing basis) would be required for an extension of ongoing up move. Else, consolidation in the broader range of 18300- 17800 wherein broader market would relatively outperform. Thus, any dip from hereon should be capitalised as incremental buying opportunity to ride next leg of up move. Structurally, our positive bias is based on following observations:

a) The breakout from inverted head and shoulder pattern, signifies positive bias

b) The percentage of stocks above 200 days EMA for the Nifty 500 universe have jumped to 53% compared to end of March reading of 40%, indicating improvement in broader market participation

c) FII’s inflows have remained persistent amid weakness in US Dollar index

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