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Daily Technical View on Nifty

Market: Observation

• Markets corrected sharply on Wednesday after a gap down opening. Nifty finally lost 207 points or 1.05% to close at 19,526.55. Broad market indices like the BSE Mid Cap and Small Cap indices lost more, thereby under performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Short term trend turns DOWN

• Zooming into 15 min chart, we observe that Nifty witnessed selling pressure through the day. A recovery from the lows towards the closing helped to curb the losses. With the Nifty breaking its near term supports, the short term trend has turned down.

• There has also been a negative MA crossover on the 15 min chart as the 20 period MA moved below the 50 period MA during the session. Nifty could now move lower once the immediate support of 19423 is broken.

Nifty: Further downsides likely

• On the daily chart, we can observe that Nifty has broken its recent support of 19563 and also closed below the 20 day SMA. Momentum readings like the 14-day RSI too are in decline mode, which is a negative signal.

• We expect the Nifty to move towards its next supports of 19361-19303 in the coming sessions. Any pullback rallies could find resistance at 19678.

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