The index has been consolidating in the broader range of 17800-17200 - ICICI Direct
Technical Outlook
Equity benchmarks pared last week’s gains and settled the truncated week on a negative note tracking subdued global cues. Nifty closed the week at 17413 levels down 1%. In the coming session, index is likely to open on a flat note tracking global recovery. We expect Nifty futures to hold Friday’s low of 17367 and stage a pullback. Hence, use intraday dips towards 17385-17412 to create intraday long positions for target of 17505 with a stoploss of 17347.
The index has been consolidating in the broader range of 17800-17200 over past five weeks wherein it managed to hold 17200 despite global volatility amid discounting expectations of higher interest rates ahead of next week’s CPI numbers. In the process, weekly stochastic oscillator has approached near oversold territory (placed at 23), indicating impending pullback.
In the upcoming eventful week, holding 17200 post key events will keep pullback option open to revisit upper band of consolidation placed at 17800. However, in case of breach of 17200 would result into extended correction towards 16800 which we eventually expect it to hold and subsequently undergo a base formation.
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