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Daily Technical View on Nifty

Negation of bearish pattern..

Observation: After showing sharp weakness on Friday, Nifty witnessed an excellent upside bounce on Monday and closed the day higher by 223 points. After opening with a positive note, the market continues to move up after a small knee jerk action in the early trade. The gains extended in the mid to later part of the session and Nifty finally closed near the highs. A long bull candle was formed on the daily chart, beside the long negative candle of Friday. Technically, this pattern indicates a counter attack of bulls and a negation of previous bearish pattern of dark cloud cover of Friday. This is positive indication and is expected to open more upside in the coming sessions. The crucial hurdle of 22500 levels (opening downside gap of 15th April) has been challenged once again on Monday and Nifty closed above the said resistance area. The larger degree bullish pattern of higher tops and bottoms is intact and the Nifty is now moving up towards the new higher top formation of the pattern (above 22775 levels).

Conclusion: The short-term uptrend of Nifty seems to have resumed after one day of weakness. The next upside levels to be watched around 22800-22900. Immediate support is at 22500.

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