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Daily Technical View on Nifty

Market: Observation

* Markets ended higher on Tuesday after a positive opening. A strong recovery from the lows ensured the nifty ended the session with healthy gains. The Nifty finally gained 84.25 points or 0.46% to close at 18,244.2. Broad market indices like the BSE Small Cap index ended lower, thereby under performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE

Nifty: Further bounce back seems likely

* Zooming into 15 min chart, we see Nifty opened higher and then moved lower to a low of 18137 before recovering and moving higher to close near the highs of the day. The recovery has also led to a positive MA crossover on the 15 min chart as the 20 period MA has moved above the 50 period MA. Nifty could now test the 200 period SMA at 18302 in the very near term. Crucial short term supports are at 18195.

Nifty: Could move higher in the near term

* 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 is now comfortably trading above the 50 day SMA.

* Now that the Nifty has bounced back from the 20 day SMA, the uptrend looks set to continue. 14-day RSI too has bounced back showing a pick up in momentum. Nifty could now attempt to test the recent swing highs of 18442 in the coming sessions. A move below the 20 day SMA at 18113 would negate our bullish view.

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