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Daily Technical View on Nifty

Upside bounce could resume from the lows..

Observation: Weakness with choppy movement continued in the market on Thursday and Nifty closed the day lower by 28 points amidst volatility. After opening on a positive note, the market failed to sustain the morning gains and later shifted into weakness from the highs. Nifty witnessed high volatility in the mid to later part due to weekly f&o expiry and finally closed the day by erasing most of intraday losstowardsthe end.

A small negative candle was formed on the daily chart with upper and lower shadow. Technically, this action signal a formation of high wave type candle pattern, which reflects high volatility in the market. Normally, a formation of such pattern after a reasonable upside or decline indicates an impending trend reversal.

The short term chart pattern like higher tops and bottoms continued on the daily chart and current weakness seems to be in line with the formation of new higher bottom at the support of minor up trend line. But, still there is no confirmation of any short termbottomreversal in the market..

Conclusion: The short term trend of Nifty continues to be negative. The overall chart pattern and the placement of key lower support are signaling an upside bounce from near 15800 levels in the next 1-2 sessions. The confirmation of upside reversal could unfold quantumof upsidebounce in the market.

Nifty – Daily Timeframe chart

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