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Technical Outlook

Equity benchmarks extended breather over fifth session in a row. The Nifty ended weekly expiry session at 18609, up 49 points or 0.3%. In the coming session, index is likely open on a positive note tracking firm global cues. We expect index to hold past two sessions low around 18630 and trade with a positive bias. Thus, intraday dip towards 18700-18732 should be used to create intraday long positions for target of 18817

The index is undergoing slower pace of retracement wherein over past five sessions it retraced less than 50% of preceding 8 sessions up move 18133-18887, indicating inherent strength. The ongoing breather helped index to cool off overbought conditions and form a higher base that would gradually pave the way to challenge 18900 mark. Eventually we expect Nifty to head towards 19400 in coming weeks. In the process, broader market would continue with its relative outperformance. However, the move towards 19400 would be in a non-linear manner as bouts of volatility amid global development cannot be ruled out. Thus, extended breather from here on should be capitalised on as incremental buying opportunity as strong support is placed at 18300.

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