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Daily Technical View on Nifty

Choppy movement is unfolding..

Observation:

After showing a sustainable upside bounce on Tuesday, Nifty slipped into weakness amidst weak global cues on Wednesday and closed the day lower by 162 points.

A small negative candle was formed on the daily chart with minor upper and lower shadow. This pattern indicate indecision in the market participants at the lower levels. We observe a formation of few such small candle patterns of bull and bear in the last few sessions with in a narrow high low range. This indicate lack of clear direction in the market.

A symmetrical triangle type pattern was formed on the daily and in 60 mins chart. Currently, placed at the lower end of a triangle around 16900 levels. The lower area of 16800 has now become a significant valuation support for the market. The formation of small direction less candle patterns/formation of triangle pattern and repeated testing of 16900-16800 levels could hint at a possibility that market is preparing for a bigger move. Previously, the downside breakout and upside breakout of around 17000-16800 levels have resulted in a sharp follow through moves in the past

Conclusion:

The market is showing choppy movement like one day up and down type formation. The overall chart pattern indicate that Nifty is preparing for a big movement. The overall chart pattern is weighing high on the downside and the support of 16800 is expected to be a crucial base of long positions. Immediate resistance is placed at 17150 levels.

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