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Daily Technical View on Nifty

Market: Observation

* Markets ended with modest gains on Tuesday. The Nifty finally gained 55.3 points or 0.3% to close at 18,618.05. Broad market indices like the BSE Mid Cap and Small Cap indices ended lower, thereby under performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Short term weakness is seen

* Zooming into 15 min chart, we see Nifty witnessed a smart bounce in the opening session and then gradually moved higher to touch a new life high of 18678. Selling pressure from the highs in the late afternoon session however curbed the gains for the day.

* The sell off from the highs has also led to the Nifty closing below the 20 and 50 day SMA on the 15 min chart. This indicates a weak bias for very near term and Nifty could therefore test 18546 support. A move below 18546 could see Nifty drifting down further towards 18500- 18450 supports.

Nifty: Headed to new lifetime highs

* On Daily chart, we observe that Nifty has broken out of a downward sloping trend line that has held down the highs of 2021 and 2022 and rallied to new life highs. In the process, index is now trading above 20 and 50 day SMA.

* Furthermore, with the Nifty clearing the recent swing highs of 18442 and the 14-day RSI not overbought at 69.81, we believe Nifty is likely to make new life highs in the coming sessions. A move below the 20 day SMA at 18288 would negate our bullish view.

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