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Daily Technical View on Nifty

Market: Observation

* Markets surged higher on Tuesday. Selling pressure from the highs curbed the gains. Nifty finally gained 126.2 points or 0.51% to close at 24,698.85. 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: Minor weakness possible in very near term

On Nifty 15 min chart, we can observe that Nifty surged higher after finding support near the 20 period MA. It then traded in a range before giving up some of the gains towardsthe closing. In the process, Nifty has closed below the 20 period MA. which indicates a weak bias for the very near term. Crucial supports to watch in the very near term are at 24562-24522.

Nifty: Daily chart indicates uptrend could continue

* The daily timeframe indicates that Nifty has broken out of a range after consolidating above the 50 day SMA last week.

* Nifty has also filled the upper gap area at 24687 as it closed above it on Tuesday. We can therefore expect the Nifty to head towards the current life highs of 25078. Momentum indicators like the 14-day RSI too have bounced back from their recent lows and at 58.2 is not overbought. Our bullish bets will be off if the Nifty corrects and moves below the recent swing lows of 24099.

* Sectorally, most of the sectors are looking positive on the charts. The stronger sectors are Energy, Pharma, Metal and PSU Bank.

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