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Daily Technical View on Nifty

Lack of strength to sustain the bounce

Observation:

After showing a sustainable upside bounce on Tuesday, Nifty witnessed sell on intraday rise on Wednesday and closed the day lower by 31 points.

After opening with a positive note, the market moved up further in the early-mid part of the session. Sharp intraday weakness has triggered from the swing high of 25234 levels and Nifty finally closed at the lows.

A small negative candle was formed on the daily chart with long upper shadow. Technically, this market action signal rejection of bulls at the hurdles. Hence, this pattern could mean chances of further softness in the market.

With steep intraday selloff from the highs of Wednesday, the market has not yet confirmed the significant bottom reversal pattern at the recent lows.

A sustainable move only above 25200-25300 levels could confirm double bottom formation and that could possibly open doors for more upside. At the lower levels Nifty is expected to find strong support around 24700-24600 zone.

Conclusion:

The short-term trend of Nifty is still positive, but the display of lack of strength in present upside bounce likely to result in further weakness near to recent lows, before showing another round of upmove. Immediate resistance to be watched at 25250.

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