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Daily Technical View on Nifty

Market: Observation

* Markets ended lower on Monday after a positive opening. The Nifty finally lost 20.55 points or 0.11% to close at 18,329.15. Broad market indices like the BSE Mid Cap and Small Cap indices ended higher, thereby out performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Showing tiredness at the highs

* Zooming into 15 min chart, we see Nifty opened on a positive note; but selling pressure from the highs led to a negative closing.

* Nifty index is now showing signs of tiredness as it has made a lower top on the 15 min intraday chart. The 20 and 50 period MAs on the 15 min chart too have flattened and Nifty has also closed below these MAs. Further weakness is likely once the immediate supports of 18311- 18259 are broken.

Nifty: Could consolidate in near term

* On Daily chart, we observe that Nifty has broken out of a downward sloping trend line that has held down the highs of 2021 and 2022. In the process, the index is now comfortably trading above the 20 and 50 day SMA. While uptrend is matured, momentum readings like 14-day RSI at 66.75 are still not very overbought, suggesting scope for more upsides.

* However, with the uptrend matured, we remain open to minor corrections or consolidations. It is important that the Nifty holds above the short term trend reversal levels of 17969 for the uptrend to continue.

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