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Daily Technical View on Nifty

* Nifty has seen some profit booking in last two sessions. From the high of 18887, Nifty has slightly come down and hit a low at 18591 on 5th December. This fall seems to be short lived, as Nifty has been holding its levels above all important moving averages and it is holding a formation of higher tops and higher bottoms on the daily charts.

* RSI oscillator on the daily chart has reached overbought zone, but there is no sign of negative divergence is seen on the chart. RSI can remain overbought along with price rise. On the weekly charts ADX has crossed -DI line on the upside, which indicates rising bullish momentum in the Nifty. Positional trend of the Nifty is bullish and every dips should be utilized to go long in the Index.

* On a bigger time frame, Nifty has formed bullish inverted head and shoulder pattern, which projects healthy upside for the Nifty in the medium to long term. Next Targets for Nifty are seen at 19274 and 19962, which happens to be the 78.6% and 100% Fibonacci extension levels, if we consider major swings seen in last 6 months. As far as short term support is concerned, previous swing high placed at 18442 is an important level to watch out for.

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