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Daily Technical View on Nifty

Market: Observation

* Markets ended flat on Wednesday as the Nifty remained unchanged compared to the previous session. Broad market indices like the BSE Mid Cap and Small Cap indices gained more, thereby outperforming the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Has made a double bottom

* Zooming into 30 min chart, we observe that Nifty witnessed a volatile session as the index initially opened lower and touched a low of 22185 before recovering about 184 points to touch a high of 22369.

* In the process, Nifty has made a double bottom on the 30 min intraday charts. So traders will need to watch if the Nifty can hold above this bottom; else further downsides are likely.

Nifty: Short term uptrend under threat

* On the daily chart, we can observe that the Nifty has recently bounced back from a low of 21777 which also roughly coincides with a trend line support connecting the swing lows of the last two months.

* The index has subsequently corrected from life highs over three trading sessions. And is now hovering over the 50 day SMA.

* It will be important that the Nifty holds above the 50 day SMA currently at 22305; else the current short term uptrend would reverse and Nifty could then be headed lower.

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