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Daily Technical View on Nifty

Market: Observation

* Markets surged higher on Wednesday after a negative opening. The Nifty finally gained 42.95 points or 0.24% to close at 17,754.4. Broad market indices like the BSE Mid Cap and Small Cap indices gained more, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Short term uptrend still intact

* Zooming into 15 min chart, we can observe that Nifty bounced back strongly after a negative opening to close near the highs of the day.

* The very short term uptrend therefore remains intact as the pattern of higher tops and higher bottoms has not been broken yet and the Nifty continues to trade above the 50 period MA on the 15 min chart. This uptrend would reverse with a move below the recent swing low of 17645. The uptrend would gain momentum with a move above the recent swing high of 17800.

Nifty: Intermediate trend remains down

* On Daily chart, we observe that Nifty has now reversed the recent short term downtrend by crossing the previous swing high of 17468 and also closing above the 200 day EMA on Friday. Our upside targets for Nifty are at 17850-18004, which corresponds to the 50 day SMA and previous resistances.

* Intermediate trend however remains down and will reverse only on a move above 18135. Current Short term uptrend would reverse if the support of 17306 is broken.

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