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Daily Technical View on Nifty

Market: Observation

* Markets ended lower on Thursday after a volatile session. Intense selling towards the closing saw the Nifty breaking its intra day supports and closing in the red. The Nifty finally lost 65.75 points or 0.36% to close at 18,343.9. Broad market indices like the BSE Mid Cap and Small Cap indices lost less, thereby out performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Uptrend weakening

* Zooming into 15 min chart, we see Nifty opened lower and then traded in a range before finally breaking down from the range towards the closing.

* With Nifty also closing below 20 and 50 period MA on 15 min chart, near term trend is weakening. A short term trend reversal would be confirmed if Nifty breaks support of 18259.

Nifty: Could correct in the 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 intact, with the Nifty showing signs of tiredness and the 14-day RSI moving below its 9 day EMA, Nifty could correct in the near term. A move towards the 20 day SMA at 18009 is likely if the immediate support of 18259 is broken. Our bearish view would turn wrong if the Nifty crosses the immediate highs of 18442.

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