Nifty`s Strong Bounce and Positive Market Breadth Indicate More Upside - HDFC Securities Ltd
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Daily Technical View on Nifty
Market: Observation
Markets ended with modest losses on Tuesday after two sessions of healthy gains. Nifty finally lost 27.4 points or 0.11% to close at 24,194.5. Broad market indices like BSE Small Cap index gained more, thereby outperforming the Sensex/Nifty. Market breadth was positive on the BSE/NSE.
Nifty: Minor correction or consolidation is possible
On Nifty 15 min chart, we can observe that Nifty opened higher, but gradually came down from the highs to close near the lows of the day.
In the process, the 20 period MA has moved below the 50 period MA and Nifty has also closed below the 50 period MA on the 15 min chart. Short term correction towards the support of 23891 is therefore not ruled out, before a resumption of the near term uptrend. The uptrend would resume once Monday’s high of 24352 is taken out.
Nifty: Market could see more upsides
Daily timeframe indicates that with Nifty bouncing back strongly last Friday and continuing to move higher on Monday on the back of positive market breadth and outperformance from broad market indices, the odds seem higher for more upsides.
Nifty could however consolidate or witness a minor correction in the near term. Immediate upside target for Nifty is at the recent swing high of 24538. Further upsides are likely once these highs are taken out.
We must however remember that intermediate trend is still down and therefore current pullback rally may not last very long. Bank Nifty , IT, PSU Bank and Realty indices are currently the strongestsectoral indices.
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