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Daily Technical View on Nifty

Sustaining above crucial supports..

Observation: After showing a sharp intraday upside recovery from the lows on Tuesday, Nifty displayed a deep cut with high volatility on Thursday and finally closed the day lower by 167 points. A small body of positive candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicate a formation of high wave type candle pattern at the lows and this reflects a high volatility in the market. Normally, such high wave formation after a reasonable declines or near the important supports are considered as a bottom reversal post confirmations. Hence, a follow-through upmove from here could open a sustainable upside bounce for the short term. The crucial lower support of ascending trend line as per change in polarity principle remains intact around 16800-16900 levels and the Nifty retested this support during Thursday's weakness and formed a higher low. The market has witnessed a decisive upside bounce from near this trend line support in the recent past. Hence, a sustainability of this support could be crucial to expect a reasonable upside bounce in the market.

Conclusion: The market is making an attempt to reverse its down trend and still there is no confirmation of any bottom reversal at the lows. The formation of candle pattern with long lower shadows and the presence of crucial support around 16800-16900 levels are indicating a chances of a sustainable upside bounce from here or from the lows. Immediate resistance is placed at 17300 levels.

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