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Daily Technical View on Nifty

Market: Observation

• Carrying on from last Friday, markets continued to move higher. Nifty opened with an upgap on Monday and gradually climbed to close near the highs of the day. Nifty finally gained 80.3 points or 0.41% to close at 19,597.3. Broad market indices like the BSE Mid Cap index gained more, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Short term downtrend has reversed

• Zooming into 15 min chart, we observe that Nifty has gradually climbed higher in last two sessions and closed above previous swing high of 19546, thereby reversing recent downtrend

• In the process, there has been a positive moving average crossover on the 15 min chart as the 20 period MA has moved above the 50 period MA. Further upsides are likely once the immediate resistance of 19639 is taken out. Crucial supports are now at 19524-19436.

Nifty – 15 min Timeframe chart

Nifty: Likely to head higher

• On the daily chart, we can observe that Nifty has recently broken its support of 19563 and also closed below the 20 day SMA. The Nifty however managed to hold above the crucial support of 19300 and has bounced back in the last two sessions. Momentum readings like the 14-day RSI too have bounced back, which is encouraging.

• With the intra day charts showing positive price action, the odds are greater of the Nifty moving above the 20 day SMA at 19639 and heading higher towardsthe life highs.

Nifty – Daily Timeframe chart

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