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Daily Technical View on Nifty

Market: Observation

* Markets ended lower on Thursday after a positive morning session. The Nifty finally lost 82.5 points or 0.47% to close at 17,522.45. Broad market indices like the BSE Mid Cap and Small Cap indices ended higher, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Short term trend is now down

* Zooming into 15 minute chart, we see Nifty initially opened on a positive note with an upgap and broke out of its recent range in the process. But the 200 period MA provided resistance and selling pressure emerged in the afternoon session and pulled the index lower.

* The index has in the process broken its recent support, which gives the bears an upper hand for the very nearterm.

* Further downsides are likely once the immediate support of 17467 is broken.

Nifty:Daily chart shows index couldfall further

* On Daily chart, we observe that the recent bounce back from the 20 day SMA is under threat as we have seen an Engulfing line Bearish pattern on the daily chart on Thursday.

* Further weakness is therefore likely once the immediatesupports of 17467-17345 are broken.

* Our bearish view would turn wrong if the Nifty moves higher and convincingly crosses the immediateresistances of 17626-17727.

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