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Daily Technical View on Nifty

Market: Observation

* Markets ended sharply lower on Thursday after a gap down opening. The index fell during the day after the weak opening. The Nifty finally lost 430.9 points or 2.65% to close at 15,809.4. Broad market indices like the BSE Mid Cap index lost more, thereby under performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Pullback rally reversed

* Zooming into 15 minute chart, we see that Nifty has reversed the recent pullback rally and has now closed near the recent lows of 15735.

* The 20 period MA on the 15 min chart is now below the 50 period MA indicating a negative moving average crossover. A fresh down move is likely once the support of 15735 is broken.

Nifty: Daily chart shows downtrend likely to continue

* Nifty has been trending lower for the last few weeks and making lower tops and lower bottoms in the process. And Nifty has been moving lower after the recent breakdown from 16824-17415 trading range.

* While we remain open to pullback rallies in the very near term, we expect the downtrend to continue. The bears would gain more control if the support of 15735 is broken.

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