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Market: Observation

• Markets ended lower on Wednesday after the Nifty witnessed a roller coaster ride. The Nifty finally lost 30.25 points or 0.17% to close at 17,322.2. Broad market indices like the BSE Small Cap index ended higher, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: 15 min chart indicates minor weakness

• Zooming into 15 minute chart, we see that Nifty opened on a positive note and witnessed a mild correction before recovering smartly from the lows. Selling once again emerged from the highs in the afternoon session and pulled the index into negative territory.

• Thus, while the index remains in a short term uptrend, it has closed below the 20 period MA on the 15 min charts. The index could now correct further towards the 50 period MA which is currently at 17224.

Nifty: Daily chart shows index could consolidate

• With Nifty bouncing back sharply on Tuesday and filling the down gap created on Monday, the bulls do seem to have an upper hand. Wednesday’s losses seems more like a consolidation after a sharp upmove.

• The bulls could gain more control once the Nifty closes above the 20 and 50 day SMA which is currently at 17407 and 17468 respectively.

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