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Daily Technical View on Nifty

Market: Observation

* Markets ended lower on Wednesday after a volatile session. The Nifty finally lost 72.95 points or 0.45% to close at 16,167.1. 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 pullback is possible

* Zooming into 15 minute chart, we see that Nifty corrected sharply in the morning session after a positive opening. A recovery from the lows in the afternoon session helped to curb the losses.

* While the index remains in a downtrend, the 20 period MA on the 15 min chart has started to flatten, indicating that the current short term downtrend is matured and there could be a pullback rally in the very near term. Our view would turn wrong if the Nifty moves lower and breaks the support of 15992

Nifty: Daily chart shows downtrend likely to continue

* Nifty has been trending lower for the last few weeks and making lower tops and lower bottoms in the process. And Nifty has been moving lower after the recent breakdown from 16824-17415 trading range.

* While we remain open to pullback rallies in the very near term, we expect the downtrend to continue. Our short term bearish view would turn bullish only if the Nifty manages to take out the highs of 17133. Therefore recommend a go slow approach on fresh longs till we see signs of sustainable strength.

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