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Daily Technical View on Nifty

Placed around 200day EMA..Fingers crossed

Observation: After showing sharp weakness on Tuesday and Wednesday, Nifty continued its decline amidst range movement on Thursday and closed the day lower by 26 points.

A small negative candle was formed on the daily chart with long upper and minor lower shadow. Technically, though this pattern looks like doji type candle pattern, but not a classical one. Normally such doji candle formations after a reasonable decline or near the key supports are considered as an impending reversal signals post confirmation.

Nifty is now placed just below the crucial 200-day EMA at 23540. Previously, this MA has offered significant reversals and upside rally during 26th Oct and 4th June period.

Nifty slowing down the negative momentum below 200day EMA on Thursday may be a good sign, but the market needs to show more evidence to consider for potential upside reversal.

Nifty on the weekly chart formed a long bear candle, which is nearing next important support of intermediate ascending trend line around 23300 levels.

Conclusion: The underlying trend of Nifty continues to be negative. Though there are some signs of oversold nature, but still there is no confirmation of any crucial reversal pattern forming at the lows.

A decisive slide below 23500 is expected to drag Nifty down to 23200-23000 levels by next week. However, a sustainable move above 23700-23800 levels could open chances of sizable upside bounce in the market.

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