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Daily Technical View on Nifty

Market: Observation

* Markets ended with decent gains on Monday after a positive opening. Nifty finally gained 84.05 points or 0.46% to close at 18,398.85. Broad market indices like the BSE Mid Cap and Small Cap indices gained less, thereby under performing the Sensex. Market breadth was positive on the BSE/NSE.

Nifty: Short term uptrend has weakened

* Markets ended with decent gains on Monday after a positive opening. Nifty finally gained 84.05 points or 0.46% to close at 18,398.85. Broad market indices like the BSE Mid Cap and Small Cap indices gained less, thereby under performing the Sensex. Market breadth was positive on the BSE/NSE.

Nifty: Short term uptrend has weakened

* Zooming into 15 min chart, we observe that Nifty witnessed a sell off from the highs towards the closing which curbed the gains for the day.

* In the process, Nifty has broken its near term supports on the back of a big red candle on the 15 min chart, indicating that selling pressure was intense and the near term uptrend has reversed.

* Nifty could now move lower towards the next support of 18288 in the very near term. A move below 18288 could lead to further weakness.

Nifty: Short term consolidation is possible

* On Daily chart we observe that Nifty has taken out the recent swing highs of 18135 and 18201, indicating the uptrend remains intact.

* With the Nifty making a higher bottom at 18055, we expect the Nifty to consolidate in a range between 18055-18473 in the near term. A bigger fall is likely only if 18055 is broken.

* In terms of strategy, traders need to adopt an extremely selective buying approach.

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