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Daily Technical View on Nifty

Market: Observation

* Markets ended with losses on Tuesday. The Nifty finally lost 74.4 points or 0.42% to close at 17,656.35. Broad market indices like the BSE Mid Cap index ended higher, thereby out performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Could consolidate with minor weakness

* Zooming into 15 minute chart, we see Nifty opened higher, but selling pressure emerged from the highs and pulled the index lower.

* In the process, the Nifty has broken its near term support and the 20 period MA too is turning down, indicating the short term uptrend is weakening.

Nifty: Daily chart shows index could rise further

* On Daily chart, we observe that Nifty has broken out of a downward sloping trend line that has held down the highs of 2021 and 2022. In the process, the index has also cleared the 20 and 50 day SMA and now comfortably trades above them.

* Momentum readings like the 14-day RSI too are in rising mode and at 58.2 is not overbought and suggestsscope for more upsides.

* We therefore expect the Nifty to gradually move higher towards the previous intermediate highs of 18096 in the coming sessions. Short term weakness is however not ruled out. Crucial supports to watch for emergence of weakness are now at 17503.

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