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Daily Technical View on Nifty

Market: Observation

Markets ended with healthy gains on Wednesday after a bounce back from the morning lows. Nifty finally gained 80.4 points or 0.33% to close at 24,274.9. Broad market indices like BSE Small Cap index gained more, thereby outperforming the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Consolidating with a positive bias

On Nifty 15 min chart, we can observe that Nifty traded in a narrow range in morning session. But broke out of that range and moved higher to close near highs of the day. In the process, Nifty has closed above the 20 and 50 period MA on 15 min chart.

We however remain open to short term corrections towards support of 24019, before a resumption of the near term uptrend. Uptrend would gain momentum once Wednesday’s high of 24355 is taken out.

Nifty: Market could see more upsides

Daily timeframe indicates that with Nifty bouncing back strongly last Friday and continuing to move higher on Wednesday on the back of positive market breadth and outperformance from broad market indices, the odds seem higher for more upsides.

Nifty could however consolidate or witness a minor correction in the near term. Immediate upside target for Nifty is at the recent swing high of 24538. Further upsides are likely once these highs are taken out.

We must however remember that intermediate trend is still down and therefore current pullback rally may not last very long. Bank Nifty , IT, PSU Bank and Realty indices are currently the strongest sectoral indices.

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