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Daily Technical View on Nifty

Market: Observation

* Markets corrected on Thursday after a gap down opening. A recovery from the lows helped to curb the losses. The Nifty finally lost 128.8 points or 0.71% to close at 18,028.2. Broad market indices like the BSE Mid Cap and Small Cap indices lost more, thereby under performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Near crucial supports

* Zooming into 15 min chart, we see Nifty opened with a down gap and continued to drift lower before recovering from the lows. While the 20 period MA remains below the 50 period MA, indicating a negative MA crossover, the Nifty has bounced back from close to the recent lows of 17959. With positive global cues, Nifty looks set to bounce back and hold above the 17959 levels.

Nifty: Uptrend to continue

* 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. In the process, the index is now comfortably trading above the 20 and 50 day SMA. While uptrend is matured, momentum readings like 14-day RSI at 60.58 are still not very overbought, suggesting scope for more upsides.

* With the Nifty looking set to move higher on the back of positive global cues, traders will need to watch for the next major resistances at 18351. A convincing move above 18351 could lead to the Nifty targeting the life highs of 18604. Short term reversal levels remain at 17959.

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