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Daily Technical View on Nifty

Placed at the crucial support..

Observation: After showing upside recovery from the lows in the last couple of sessions, Nifty witnessed sharp downside momentum on Tuesday and closed the day lower by 157 points. After opening on a weak note, the market showed high volatility in the afternoon to later part of the session. An attempt of upside recovery towards the end has failed to sustain and Nifty closed nearthe lows.

A reasonable negative candle was formed on the daily chart with gap down opening (body gap, not a western gap). Technically, this pattern indicate that the market could have gained momentum on the downside after a range boundmovement ofthe lasttwo sessions.

After the upside breakout of the resistance of down sloping trend line at 16100 levels recently, the market has failed to sustain the highs and reversed down from the highs. The significant overhead resistance of previous opening downside gap of 13th June at 16170 has turned out to be a crucial resistance for the Nifty after filling the gap. Few such opening downside gaps in the last 2-3 months have been left unchallenged after filling during down trend. Hence, bulls need to be careful fromhere..

Conclusion: The underlying trend of Nifty seems to have turned down for short term correction. Nifty showing lack of strength post upside breakout of resistance and the presence of important hurdle of down gap resistance at 16170 levels signal more weakness ahead for the market. A decisive move below the next support of 15900 could open further declines ahead.

Nifty – Daily Timeframe chart

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