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Daily Technical View on Nifty

Strong comeback of bulls from lows..

Observation: After showing sharp weakness on Tuesday, Nifty shifted into a sustainable upside bounce amidst volatility on Wednesday and closed the day higher by 215 points.

After opening with a negative note, the market moved swiftly up in the early part of the session. Intraday selling pressure has emerged at the high of 21400 levels in the mid part. Sharp intraday buying propelled the market to move up in the later part and Nifty closed near the highs.

A long positive candle was formed on the daily chart after opening lower, which is indicating a formation of bullish Piercing line type candle pattern. Formation of such patterns after a reasonable weakness calls for caution for shorts.

The negative chart pattern like lower tops and bottoms is intact and the Nifty is currently moving up towards the formation of new lower top of the sequence (which is yet to be formed at the highs). Nifty is currently placed at the hurdle of mid part of Tuesday'slong bear candle at 21500 levels.

Conclusion: The short-term trend of Nifty seems to have reversed up. But, the uncertainty remains in the market at the highs. The market could encounter strong resistance around 21500-21600 levels in the coming session. Immediate support is at 21220.

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