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Daily Technical View on Nifty

Observation: After showing sustainable upmove in the last few sessions, Nifty witnessed sharp intraday downward reversal from the highs on Tuesday and closed the day lower by 24 points. After opening with a positive note, the upside momentum continued in the early-mid part of the session. The weakness got triggered from the swing high of 16025 levels and the entire intraday gain was erased during second half and the market closed at the lows on Tuesday.

A reasonable negative candle was formed on the daily chart with long upper shadow. Technically, this pattern signal a false upside breakout of the strong resistance as well as the upper range at 15950 levels (high low range of 15700-15900 levels).

The crucial overhead resistance of 15850-15900 as per the concept of change in polarity remained unchallenged. Previously, such false upside breakout has resulted in a minor downward correction amidst range movement. Hence, one may expect further weakness in the short term.

Conclusion: The short tern trend of Nifty seems to have reversed down from the highs and the current chart pattern indicate possibility of further weakness in the short term. One may expect Nifty to slide down to 15600-15500 levels again in the near term.

Nifty – Daily Timeframe chart

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