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Daily Technical View on Nifty

Market: Observation

* Markets ended with marginal gains on Wednesday after a volatile session. The Nifty finally gained 23.05 points or 0.13% to close at 18,267.25. 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: Further bounce back seems likely

* Zooming into 15 min chart, we see Nifty initially opened with an upgap, but then came down and traded in a range. It then surged to a high of 18313, before coming down sharply towards the close. On the 15 min chart, we can also observe that the swing high of 18327 made on 18th Nov is acting as a resistance as Nifty has been unable to cross these levels and came down towards the closing. So while the near term trend remains up, traders will need to see if the Nifty can continue to hold above the recent supports of 18195 for the current uptrend to sustain.

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 20 and 50 day SMA.

* While the near term trend remains up, the fact that the 18327 levels are acting as a resistance could limit the upsides in near term. Nifty could therefore consolidate in a range for the next few sessions before trying to find direction. A move below the 20 day SMA at 18138 would negate our bullish view.

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