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Daily Technical View on Nifty

Market: Observation

* Markets ended flat on Tuesday after a positive opening. Nifty finally gained only 1.55 points or 0.01% to close at 18,265.95. Broad market indices like the BSE Small Cap index lost more, thereby under performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Short term uptrend still intact

* Zooming into 15 min chart, we observe that Nifty opened on a positive note and gradually climbed higher. Selling pressure from the highs however wiped out the morning gains.

* While the short term trend remains UP, it is now matured. Immediate supports to watch for weakness are at 18229. A move below 18229 could lead to testing of next support at 18150.

Nifty: Short term consolidation is possible

* On Daily chart we observe that Nifty has taken out the recent swing highs of 18135 and 18201, indicating the uptrend remains intact. However, with the sharp rise seen recently and 14-day RSI correcting from the 73 levels, we remain open to short term corrections or consolidations.

* With the Nifty making a higher bottom at 18055, we expect the Nifty to consolidate in a range between 18055-18350 in the near term. A bigger fall is likely only if 18055 is broken.

* In terms of strategy, traders need to adopt an extremely selective buying approach.

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