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Daily Technical View on Nifty

Placed at the crucial support…

Observation: The sharp downside momentum continued in the market for the third consecutive sessions on Thursday and the Nifty closed the day lower by 181 points amidst volatility. After opening with a negative note, the gradual weakness continued with range bound action in the early-mid part of the session. A sustainable intraday upside recovery has emerged towards the end and the market closed the day by erasing some of the intraday loss. A long bear candle was formed on the daily chart with lower shadow. This is back to back three such negative candles in a row in the last three sessions. Technically, this pattern signal a sharp profit booking in the market from the highs of 18350 and the formation of lower shadow on Thursday could signal chances of buying emerging from the lower support of 17650 levels. Nifty is now placed at the support of 17650-17700 levels (value area in terms of previous swing highs and lows as per the concept of change in polarity). Having declined swiftly from the highs, there is a higher chance of upside bounce emerging from the lower levels. The confirmation by the way of higher bottom reversal could open the quantum of upside bounce in the market ahead.

Conclusion: The short term trend of Nifty continues to be negative and there is no clear evidence of any bottom formation at the lows. A sustainable upmove in the subsequent session is likely to confirm higher bottom reversal in the market. The lower area of 17650-17600 levels is expected to be a strong support zone for the market ahead.

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