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Daily Technical View on Nifty

Market: Observation

* Markets ended flat on Tuesday after a positive opening. Nifty finally gained 2.85 points or 0.01% to close at 19,396.45. 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 supports need to hold

* Zooming into 15 min chart, we observe that Nifty witnessed selling pressure from the highs which pulled the index lower to finally close with marginal gains.

* It is now important that the Nifty holds above the immediate support of 19296; else the current uptrend would reverse.

Nifty: Near crucial supports

* On the daily chart, we can observe that Nifty has again showed some weakness after bouncing from the 50 day SMA. So unless, it can convincingly take out Tuesday’s highs of 19444, there is a good chance it may retest the 50 day SMA at 19334. And if it breaks 19334-19296, a bigger correction is likely.

* In terms of strategy, we recommend a go slow approach with respect to fresh long positions till we see signs of sustainable strength.

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