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Daily Technical View on Nifty

Market: Observation

* Markets corrected on Monday after a positive opening. The Nifty finally lost 70.5 points or 0.37% to close at 18,755.5. Broad market indices like the BSE Small Cap index ended higher, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Showing tiredness at the highs

* Zooming into 15 min chart, we observe that the Nifty opened higher, but then witnessed selling pressure from the highs and gradually moved lower to close near the lows of the day.

* In the process, there was a negative moving average crossover as the 20 period MA moved below the 50 period MA on the 15 min chart.

* Nifty could now move lower once the immediate support of 18719 is broken. Crucial resistances to watch for re emergence of strength are at 18786-18797.

Nifty: Daily chart forms a Dark Cloud Cover

* While the Nifty remains in an uptrend as per the daily charts, on Monday it formed a dark cloud candlestick pattern, which is considered a bearish pattern. A cautious approach is thus warranted for the near term.

* Further downsides are likely once the immediate supports of 18719-18710 are broken. Next major supports are at 18585 which coincides with the 20 day SMA.

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