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Technical Outlook

Equity benchmarks drifted lower as rate hike by the RBI spooked market sentiment. The Nifty settled Wednesday’s session at 16678, down 392 points or 2.3%. In the coming session, index is likely to witness positive opening tracking firm global cues. We expect index to hold Wednesday’s low and trade with a positive bias amid rise in volatility owing to weekly derivative expiry. Hence, use intraday dip towards 16680-16712 for creating long position for the target of 16797 The breakdown from past nine sessions consolidation (17400-16800) signifies extension of corrective bias. Key point to highlight is that, past four weeks corrective phase has hauled weekly stochastic oscillator in oversold territory (currently placed at 17), indicating possibility of short term pullback can not be ruled out. However, only a decisive close above past two sessions high of 17100 would pause the ongoing corrective phase, else extended correction. Structurally, the formation of lower high-low on the monthly chart signifies extended correction. We believe, strong support for the Nifty is placed at 16200-16100 zone

Nifty Daily Chart

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