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Daily Technical View on Nifty

Range movement with weak bias..

Observation:

After showing a sustainable upside bounce on Friday, Nifty slipped into weakness with range bound action on Monday and closed the day lower by 109 points. After with a negative note, the market slipped into further weakness in the early part of the session. It later made an attempt to show upside recovery from the lows amid choppy movement, but failed to sustain the highs towards the end and closed near the lows. A small negative candle was formed with gap down opening (body gap, not a western gap) on the daily chart, which is placed beside the long positive candle of Friday. Technically. this pattern reflect ongoing sideways movement in the market at the support of 17600 levels. The positive sequence like higher tops and bottoms is active and there is no confirmation of any higher bottom reversal as of now. Nifty is currently placed at the 10day EMA around 17650 levels and a move below this area could drag Nifty down to another support of 20 day EMA around 17450 levels. Nifty as per weekly chart showing weak signal. A doji type candle pattern was formed in last week at the important resistance of 18150 levels. Hence, any attempt of upside bounce could attract selling pressure in the near term.

Conclusion:

The short term trend of Nifty continues to be weak with range bound action. Still there is no indication of any higher bottom formation. A slide below 17600-17500 levels could open more weakness in the near term. A choppy movement within high low of 17800-17600 is likely to continue for the short term.

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