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Technical Outlook

Equity benchmarks extended losses over third consecutive week tracking escalating geopolitical concerns. The Nifty drifted down 3.6% to end the week at 16658. In the coming session, index is likely to open on a subdued note tracking muted Asian cues. Only a follow through strength above Friday’s high (16763) would open pullback options, else consolidation amid elevated volatility owing to escalating geopolitical issues. Thus, use intraday pullback towards 16710-16740 for creating short position for target of 16623

In the upcoming truncated week, volatility expected to remain high tracking ongoing geopolitical concerns. Consequently, global cues will dictate the future trend. We believe holding above key support threshold of 16200 would keep pullback options open. Further, a decisive close above 16800 along with cool off in VIX and crude oil will add fuel to the ongoing pullback rally towards 17200. Time wise index has maintained the rhythm of not correcting for more than three consecutive weeks, since April 2020. In the current scenario, as the index has already corrected over past three weeks, we believe Nifty is poised for a technical pullback.

Nifty Daily Chart

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