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Daily Technical View on Nifty

Market: Observation 

Markets ended lower on Tuesday after a volatile session. The Nifty finally lost 114.45 points or 0.67% to close at 17,092.2. Broad market indices like the BSE Small Cap index lost more, thereby under performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: 15 min chart indicates a double bottom

* Zooming into 15 minute chart, we see that Nifty opened with a big gap down in the morning. But a strong recovery from the lows helped the Nifty to recover a major part of the losses.

* On the 15 min chart, we can also observe that Nifty has bounced back from close to its previous lows of 16809 made on 14th Feb 2022, implying a double bottom pattern. Further upsides are now likely if the Nifty takes out Tuesday’s high of 17149. Crucial support to watch for resumption of weakness is at 16909.

Nifty: Daily chart shows index could be range bound

* With the Nifty bouncing back sharply from the 200 day SMA and close to its previous lows of 16809, the bulls are not giving up easily. The Nifty is also holding above the 200 day EMA and a major intermediate trend line that has held the lows of 2021 and early 2022. 

* While Nifty could rally further, with weak market breadth and broader markets still correcting, upsides could be limited and Nifty could at best remain range bound in the coming sessions. And if the ongoing Russia-Ukraine crisis escalates, Nifty could move down towards the 50 week SMA at 16543.

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