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Daily Technical View on Nifty

Market: Observation

* Markets surged higher on Monday after a gap up opening. It was the fourth consecutive positive closing for the Nifty. The Nifty finally gained 181.8 points or 1.06% to close at 17,340.05. Broad market indices like the BSE Mid Cap and Small Cap indices gained more, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Index in a short term uptrend

* Zooming into 15 minute chart, we see that Nifty opened with an upgap and after a minor correction in the morning session, gradually climbed back to close nearthe highs ofthe day.

* The uptrend remains firm as the 20 period MA remains above the 50 period MA and the index is consistently rising with the 20 period MA provding support. A close below 15863 would howeverreverse currentshorttermuptrend.

Nifty:Daily chart shows index couldsoon consolidate

* On Daily chart, we can observe that Nifty has been rising strongly for four consecutive sessions after finding support at 200 day EMA. The 14-day RSI at 75.29 too has entered overboughtterritory.

* We therefore feel that while the uptrend islikely to continue, the index could witness a minor correction or consolidate in a range before resuming the uptrend.

* Immediate supports to watch are at 17154- 17018.

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