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Technical Outlook

The equity benchmarks outperformed global peers as Nifty gained 2.5% for the week to settle Friday’s session at 18065. In the coming session, index is likely to witness gap up opening tracking firm global cues. We expect, index to accelerate upward momentum as intraday dips are getting bought into, leading to higher high-low formation. Hence, use intraday pullback in May future towards 18120-18152 to create intraday long positions for target of 18237 with a stoploss of 18084.

Going ahead, we expect, index to endure its northbound journey and gradually head towards milestone of 18300 in coming weeks. Key point to highlight is that, index has recorded breakout from an inverted head and shoulder pattern, indicating bullish reversal. Thus, bouts of volatility owing to Fed meet outcome should be capitalised to accumulate quality stocks amid progression of earing season. The current rally (1260 points) from March lows is now the largest in terms of magnitude in five months. Consequently, the index logged a resolute breakout from four month’s falling channel indicating resumption of uptrend.

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