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Technical Outlook

Equity benchmarks started the week on a subdued note tracking weak global cues. Nifty ended Monday’s session at 16614, down 2.2%. In the coming session, the index is likely to open on a positive note tracking mixed global cues. However, we believe initial pullback will remain short lived as intraday resistance is placed around 16900 range. Hence use pullback towards 16840-16870 for creating short position for target of 16762

The breach of key support of 16800 along with lower high-low formation signifies extended correction. We believe, for a meaningful pullback to materialise index need to form a higher high-low on the closing basis. Key point to highlight is that, over past six sessions index has declined 1230 points that hauled daily and weekly stochastic oscillator in oversold territory (placed at 13). We expect volatility to gradually subside near oversold territory which would help Nifty to find supportive efforts in the range of 16300-16200

Nifty Weekly Chart

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