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Daily Technical View on Nifty

Profit booking on cards..

Observation:

After showing an excellent upside movement on Monday, Nifty slipped into a profit booking mode on Tuesday and closed the day lower by 96 points. After opening on a positive note, the market failed to sustain the highs soon after the opening. The weakness with range movement continued in the mid part and the downside momentum got strengthened towardsthe end.

A reasonable negative candle was formed on the daily chart beside the long bull candle of previous session. This indicate minor profit booking in the market from the highs. Tuesday's weakness so far not damaged the recent uptrend status of the market. Nifty is currently showing consolidation/minor weakness at the crucial overhead resistance of down sloping trend line around 18200 levels (trend line connected larger swing highs).

The positive chart pattern like higher highs and higher lows is intact as per daily chart and present consolidation movement could form a new higher low in the short term. We observe broader range movement in Nifty in the recent past and one may expect similar range movement to unfold in the next few sessions

Conclusion:

The sharp upside momentum in the market seems to have halted and the Nifty shifted into a minor profit booking mode. The sharp weakness is unlikely to occur from here, but one may expect range movement around 18200-17800 levels for the next few sessions. The important resistance of 18200 levels could eventually be broken on the upside.

Nifty – Hourly Timeframe chart

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