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Daily Technical View on Nifty

Market: Observation

* Markets corrected marginally on Tuesday. It was the fifth consecutive session of daily losses. Nifty finally lost 8.9 points or 0.05% to close at 17,007.4. Broad market indices like the BSE Mid Cap and Small Cap indices ended higher, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Short term downtrend is now matured

* Zooming into 15 minute chart, we see Nifty initially opened with an up gap, but gradually came down during the day.

* While the short term trend remains down, the downtrend seems matured as the 20 and 50 period MAs have flattened on the 15min charts. We therefore feel that the downsides are limited from current levels. The 200 day EMA is currently at 16883 (about 120 points away) could be a level where the current downtrend halts andmarkets bounce back.

Nifty:Daily chart shows index couldbounce back

* On Daily chart, we observe that Nifty has corrected for the last 5 sessions after breaking out of the downward sloping trend line that has held down the highs of 2021 and 2022.

* The Nifty is now near the 200 day EMA at 16883, which could act as a support in the very near term. Traders will need towatch if the Nifty can hold above these levels; else the Nifty could move down further towards the 20 week SMA at 16797. Any rallies on the upside could first find resistance at 17383, which isthe 50 day SMA.

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