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Technical Outlook

Equity benchmarks started the week on a subdued note tracking weakness in rupee and weak global cues. The Nifty ended Monday’s session at 16302, down 109 points or 0.7%. In the coming session, index is likely to open on a subdued note tracking weak global cues. We expect supportive efforts to emerge from key support of 16100. Hence, after a negative opening use dip towards 16085-16115 for creating long position for the target of 16203 Going forward, for a meaningful pullback to materialize, index need to witness follow through strength and decisively close above previous session high of 16400, else continuance of corrective bias amid elevated global volatility. Further, only a breach below key support of 16100 would lead to extended correction towards March low of 15700. On the contrary, we observe that past four weeks corrective move hauled daily and weekly stochastic oscillator in extreme oversold territory. Historically, after approaching such lower reading, markets have witnessed technical pullback. Thus, one should capitalise dips to construct portfolios in quality stocks in a staggered manner.

Nifty Daily Chart

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