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Technical Outlook

Equity benchmarks snapped three days winning streak as rupee dipped at new low amid rising crude that weighed on sentiment. The Nifty slipped 77 points or 0.5% to settle Tuesday’s session at 16585. In the coming session, index is likely to open on a flat note tracking mixed global cues. We expect buying demand to emerge from upper band of Monday’s gap area placed around 16460. Hence, use intraday dip towards 16490-16520 for creating long for target of 16606.

The rejuvenation of upward momentum backed by improvement in market breadth signifies broad based participation. In addition to that cool off in VIX highlights improved market sentiment that augurs well for extension of ongoing pullback towards 16800 in coming sessions. Thus, temporary breather from here on should not be construed as negative. Instead dips should be capitalised on to accumulate quality stocks. Our target of 16800 is based on following observations: a) 200 day’s EMA placed at 16750 b) 50% retracement of the entire AprilMay decline (18115-15735)

Nifty Daily Chart

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