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Daily Technical View on Nifty

Market: Observation

* Markets corrected further on Tuesday after a positive opening. Nifty finally lost 63.05 points or 0.26% to close at 23,992.55. Broad market indices like the BSE Mid Cap and Small Cap indices lost more, thereby underperforming the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Near term downtrend intact

* On 15 min chart, we can observe that Nifty opened higher. But selling pressure from the highs pushed the Nifty into negative territory as it finally closed near the lows of the day.

* While the downtrend is intact, the Nifty is near some strong supports of 23960-23883. This opens the possibility of a pullback rally. A move above immediate resistance of 24078 could trigger a pullback rally.

Nifty: Near the 50 day SMA; could pullback

* Nifty is now in a confirmed downtrend after breaking the previous lows of 24210-24074. The index is however now close to the 50 day SMA.

* This opens the possibility of a pullback rally emerging if the Nifty crosses the immediate resistances of 24078-24127.

* However, if the global cues remain weak, then the downtrend is likely to continue and Nifty could move below the 50 day SMA currently at 23883 and head further down towardsthe next support of 23667.

* Sectorally, defensive sectors like Pharma and FMCG have fallen less and could therefore continue to outperform.

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