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Daily Technical View on Nifty

Market: Observation

• Markets crashed on Thursday after a gap down opening. The Nifty finally lost 815.3 points or 4.78% to close at 16,247.95. 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: 15 min chart indicates downtrend intact

• Zooming into 15 minute chart, we see that Nifty opened sharply lower with a down gap and after a brief pullback rally resumed its downtrend.

• On the 15 min chart, we can also observe that the pattern of lower tops and lower bottoms seen over the last few sessions remains intact. And the 20 period MA on the 15 min chart remains below the 50 period MA indicating a negative MA crossover.

Nifty: Daily chart shows index could fall further

• With the Nifty correcting sharply and closing below the previous intermediate lows of 16410, the bears now have an upper hand.

• The Nifty has also closed below the 200 day EMA and broken a major intermediate trend line.

• We therefore expect the Nifty to move down further towards the next major support of 15962 in the coming sessions. Any pullback rallies could find resistances at 16520-16705.

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