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Daily Technical View on Nifty

Market: Observation

* Markets surged higher on Monday to close below the current life highs of 25078. It was the eight consecutive session of gains for the Nifty. Nifty finally gained 187.45 points or 0.76% to close at 25,010.6. Broad market indices like the BSE Mid Cap and Small Cap indices gained less, thereby underperforming the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Nifty: Short term uptrend looks set to continue

On Nifty 15 min chart, we can observe that Nifty opened with an upgap and continued to climb higher. The 50 period MA on the 15 min chart is providing excellent support to the stock and the 20 period MA also continues to trade above the 50 period MA, indicating the recent positive MA crossover is intact.

Nifty could now attempt to test the life highs of 25078 in the very near term. Crucial supports to watch in the very near term are at 24874-24771.

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 two weeks back.

* Nifty has also filled the two gap areas as it closed above it on Monday. With momentum indicators like 14-day RSI at 64.56 and not overbought, we expect the Nifty to test current life highs of 25078 and make new life highs. Our bullish bets will be off if Nifty corrects and moves below recent swing lows of 24771.

* Sectorally, most of the sectoral indices are looking positive on the charts. The stronger sectors are Auto, CPSE, Energy, Pharma, Infra, IT and Metal.

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