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Daily Technical View on Nifty

Market: Observation

* Carrying on from last week, markets surged on Tuesday after a gap up opening. Nifty gained 82.65 points or 0.46% to close at 18,147.65. 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: Short term uptrend now matured

* Zooming into 15 min chart, we observe that Nifty traded in a range after the positive opening and finally closed with healthy gains.

* While the short term trend remains UP, it is now matured. The nifty has also closed below the 20 period SMA on the 15 min chart, indicating short term weakness is possible. Next support is at 18058, which corresponds to 50 period SMA.

Nifty: Short term correction is likely

* On Daily chart we observe that Nifty has taken out the recent swing high of 18135, indicating the uptrend remains intact. However, with the sharp rise seen recently, we remain open to short term corrections or consolidations.

* A short term correction is likely once the immediate support of 18101 is broken. Next major support to which the Nifty could play down to is the previous swing high of 17863.

* In terms of strategy, traders should be looking for buying opportunities especially on any dips towards the support of 17863.

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