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Daily Technical View on Nifty

Display of decisive upside breakout of 16800..

Observation: After showing a sustainable upside bounce from the swing lows of 16438 levels on Wednesday, Nifty witnessed an excellent upside breakout on Thursday and closed the day higher with hefty gains of 287 points. After opening with an upside gap of 133 points, Nifty continued its upside momentum which lasted for the whole session. Minor intraday volatility was seen towards the end and Nifty closed near the highs. The opening upside gap remains unfilled.

A long bull candle was formed on the daily chart with gap up opening, which display sharp upside momentum in the market. Nifty witnessed upside breakout of the crucial overhead resistance of 16800 levels (resistance as per the concept of change in polarity) and is now trading higher. Previously, the area of 16800 has witnessed strong reversal on the eitherside and the Nifty showed sharp moves during both upside and downside breakouts in the past. Nifty recently showed minor weakness from near the hurdle (approx 300 points of downward correction) and now placed above this hurdle in a quick move. Hence, one may expect continuation of upside momentumforthe nearterm.

Conclusion: The short term trend of Nifty has turned sharply on the upside. As per the theories of upside breakout of crucial resistance, unfilled opening gaps and the positive chart pattern like higher tops and bottoms are all indicating more upside ahead for the market. Next upside target to be watched around 17500 levels. Immediate supportis placed at 16800-16750 levels.

Nifty – Daily Timeframe chart

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