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Daily Technical View on Nifty

Market: Observation

•Markets surged higher on Friday to close with gains for the third consecutive session. The Sensex in fact managed to recover all the losses seen recently and touched a new life high. Nifty finally gained 468.75 points or 2.05% to close at 23,290.15. Broad market indices like the BSE Small Cap index gained more, thereby outperforming the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Near term uptrend intact

•On 15 min chart, we can observe that Nifty opened on a positive note and quickly crossed the previous session’s highs with the 20 period MA providing support.

• It then gradually climbed higher to close near the highs of the day. We also observe that the 20 period MA remains above the 50 period MA indicating the recent positive moving average crossover is intact. Important that the support of 22964 holds on any short term correction

Nifty: Set for new life highs

•On Daily chart, we can observe that Nifty has now recovered almost all the losses seen recently. While we expect new life highs in the coming sessions, Nifty could now face resistance at the recent life highs of 23339, before resuming its uptrend. We therefore remain open to short term corrections.

•It is however important that crucial supports of 23110-22789 are not broken. Else the current uptrend would reverse. Sectorally, all major indices have bounced back and resumed their uptrend. PSU Bank index has however not bounced back strongly, indicating it could underperform in the near term.

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