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Daily Technical View on Nifty

Market: Observation

* Carrying on from the previous session, markets rallied strongly on Monday. The Nifty finally gained 308.95 points or 1.89% to close at 16,661.4. Broad market indices like the BSE Mid Cap and Small Cap indices gained more, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Short term uptrend looks set to continue

* Zooming into 15 minute chart, we see that Nifty opened with an upgap and continued to rally during the day. The short term uptrend remains intact as the Nifty continues to make higher tops and higher bottoms. And the 20 period MA remains above the 50 period MA, indicating the positive MA crossoverisintact.

* Traders will now need to watch if the Nifty can cross the 200 day EMA currently at 16753 for the rally to continue. Immediate supports to watch for weakness are now at 16506-16415..

Nifty:Daily chart shows Niftynear crucial resistance

* On the Daily chart, with the Nifty convincingly breaking out of the 16415 resistance, the uptrend looks set to continue. The Nifty is comfortably trading above the 20 day SMA and the 14-day RSI at 54.11 is in rising mode and not yet overbought.

* The Nifty is however near the 200 day EMA currently at 16753. The index would therefore need to cross these levels for the uptrend to continue. Immediate supports are now at 16506-16415.

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