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Daily Technical View on Nifty

Market: Observation

Markets corrected on Thursday after a weak opening. Nifty finally lost 284.7 points or 1.16% to close at 24,199.35. Broad market indices like the BSE Mid Cap and Small Cap indices lost less, thereby outperforming the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Short term trend is now down

On Nifty 15 min chart, we can observe that Nifty has corrected sharply from the highs and broke the previous swing lows of 24281. It then traded in a range from the late morning session.

In the process, the 20 period MA has moved below the 50 period MA on the 15 min chart, indicating a negative MA crossover.

More downsides in the very near term are therefore likely as long as the immediate resistance of 24261 is not taken out.

Nifty: Daily chart indicates weakness is likely

Daily timeframe indicates that while there was a strong bounce back recently from the lows of 23816, the sharp fall on Thursday from the 20 day SMA indicates that the bulls are not in control yet.

Momentum indicators like the 14-day RSI too have moved lower after their recent bounce back.

Our bearish bets will be off if Nifty rises and crosses the highs of 24538.

Sectorally, the strongest sectors currently are Bank Nifty and PSU Bank indices.

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