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Daily Technical View on Nifty

Market: Observation

* Markets ended with decent gains on Wednesday. Nifty finally gained 47.55 points or 0.25% to close at 19,444.0. 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 supports need to hold

• Zooming into 15 min chart, we observe that Nifty witnessed a healthy bounce back from the lows to close with decent gains. The index is now trading in a narrow range and a move above the recent swing high of 19483 would give the bulls an upper hand.

• It is also important that the Nifty holds above the immediate support of 19366 on any corrections; else current uptrend would reverse.

Nifty: Near crucial supports

• On the daily chart, we can observe that Nifty has gradually moved higher after bouncing from the 50 day SMA. So unless, it can convincingly take out the recent swing highs of 19483, there is a good chance it may retest the 50 day SMA at 19351. And if it breaks the 19351-19296 supports, a bigger correction is likely.

• In terms of strategy, we recommend a go slow approach with respect to fresh long positions till we see signs of sustainable strength

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