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Daily Technical View on Nifty

Pullback rally on cards..

Observation:

After showing sharp weakness in the last couple of sessions, Nifty witnessed a sustainable upside bounce on Tuesday and closed the day higher by 246 points. After opening with an upside gap of 167 points, the market moved up in the early part of the session. Intraday range movement was observed in the mid part and the buying has emerged again towards the end. The opening upside gap remains unfilled.

A reasonable positive candle was formed on the daily chart with minor upper and lower shadow. This market action confirms that the recent swing low of 16888 of Monday could now be considered as a minor reversal pattern on the upside. Hence, the market could make an attempt to move up further in the short term, but sustainability at the highs could be a cause of concern

The lower area of 16800 has now become an important valuation support for the market. The Nifty has witnessed sharp two sessions of upmove from this support in the recent past. Hence, the present upmove from near the same support could bring some hopes for bulls to make a comeback.

Conclusion:

The market showed relief rally after two day's of weakness. The upper area of 17300-17400 is expected to be tough task for the market to surpass into. Any lack of strength in further upside bounce at the highs could bring another round of selling pressure to retest lower support of 16800 levels.

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