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Technical Outlook

Equity benchmarks extended losing streak over third session in a row amid escalation of Covid cases globally. The Nifty ended the session at 18127, down 72 points or 0.4%. In the coming session, index is likely open on a negative note tracking weak global cues. The breach of 50 days EMA signifies prolongation of corrective bias. Thus, any pullback from here on towards 18155-18185 should be used to create intraday short positions for target of 18067

The formation of a lower high-low signifies continuance of corrective bias. We expect, the index to prolong the ongoing corrective phase wherein strong support is placed at 17900. The past three week’s secondary correction (4%) helped index to cool off overbought conditions (weekly stochastic placed at 28 levels), indicating healthy retracement of past nine weeks 13% rally. Thus, extended dip from here on should be used as buying opportunity in quality stocks. In the process, current week’s high of 18500 would act as key resistance in coming sessions

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