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Daily Technical View on Nifty

Market: Observation

• Markets ended with healthy gains on Thursday after a weak morning session. Selling pressure in the last one hour of trade curbed the gains. It was nevertheless the third consecutive session of gains for the Nifty. The Nifty finally gained 142.05 points or 0.81% to close at 17,605.85.

• Broad market indices like the BSE Mid Cap and Small Cap indices gained less, thereby under performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: 15 min chart indicates tiredness at higher level

• Zooming into 15 minute chart, we see that Nifty opened on a shaky note and after a brief correction found support at the 20 period SMA.

• The index subsequently resumed its uptrend by moving higher. But found resistance at the 20 day SMA on the daily chart. And towards the closing, the index closed below the 20 period SMA on the 15 min chart.

• The index was thus showing signs of tiredness and could therefore correct in the very near term towards the 17499-17427 levels.

Nifty: Daily chart shows index could consolidate

• With Nifty bouncing back from close to its trend line support on Tuesday and surging higher on Wednesday, the bulls seem to be back.

• But with Nifty finding resistance at the 20 day SMA, the index could consolidate between the 17374-17639 levels in the coming sessions before resuming the uptrend.

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