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Daily Technical View on Nifty

Market: Observation

• Markets bounced back sharply on Tuesday as it recovered almost all the losses seen on Monday. The Nifty finally gained 509.65 points or 3.03% to close at 17,352.45.

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

Nifty: 15 min chart indicates downtrend has reversed

• Zooming into 15 minute chart, we see that Nifty opened on a positive note and after a brief correction continued to move higher during the day. In the process, the index also crossed the previous session’s high and closed near the highs of the day.

• The index has therefore reversed the recent short term downtrend. This is also confirmed by the 20 period MA moving above the 50 period MA on the 15 min charts. Our immediate upside targets are at 17447, which corresponds to the recent swing highs. Crucial supports to watch for weakness are at 17280.

Nifty: Daily chart shows index could consolidate with a positive bias

• With Nifty bouncing back sharply and filling the down gap created on Monday, the bulls do seem to have an upper hand.

• The bulls could gain more control once the Nifty closes above the 20 and 50 day SMA which is currently at 17448 and 17466 respectively.

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