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Daily Technical View on Nifty

Continuation of down trend..

Observation:

Nifty continued with follow-through weakness on Tuesday amidst volatility and closed the day lower by 144 points. After opening with a downside gap of 91 points, Nifty slipped into weakness in the early part of the session. It later shifted into a range bound action in the afternoon and made an attempt to show upside recovery in the mid to later part of the session.

A reasonable negative candle was formed on the daily chart with minor lower shadow. Technically, this pattern indicate continuation of weakness in the market. After sliding below the initial support of 17600 levels on Monday, Nifty is now placed at the next lower support of around 17500-17450 levels. Though, Nifty placed at the support, still there is no indication of any convincing bottom reversal pattern at the lows and one may expect further weakness in the short term.

After showing resilience in the last few sessions, the market breadth has turned into negative on Tuesday and broad market indices have closed in the red. This is not a good sign and one may expect further weakness ahead.

Conclusion:

The short term trend of Nifty continues to be negative. Though, Nifty placed at the support of 17400 levels, there is a possibility of further weakness in the short term. The market could possibly find support around 17300 levels and is expected to bounce from the lows.

Nifty – Hourly Timeframe chart

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