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Technical Outlook

Equity benchmarks staged a strong comeback after Friday’s sharp decline. The Nifty surged 208 points to settle Monday’s session at 18015. In the coming session, index is likely open on a positive note. The follow through strength above Monday’s high would lead to extended pullback. Thus, intraday dip towards 17950-17982 should be used to create intraday long positions for target of 18066

Going ahead, follow through strength above Monday’s high 18084 would open the door for extension of ongoing pullback towards 18300. We expect index to form a higher base and pave the way for next leg of up move. Key point to highlight is that, since June 2022 lows, price-wise index has not corrected for more than 8% and time wise decline has not extended for more than three consecutive weeks. In current scenario, we expect index to maintain the same rhythm as it has already corrected 6% over past three weeks which hauled daily and weekly stochastic oscillator in oversold territory, indicating possibility of extension of pullback. Thus, bouts of volatility owing to monthly expiry should not be construed as negative, instead dips should be used as incremental buying opportunity

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