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Daily Technical View on Nifty

Sharp upside reversal..

Observation:

After showing weakness on Monday, Nifty witnessed sharp comeback on the upside on Tuesday and closed the day higher by 177 points. After opening with a positive note, the market continued its upside momentum for the whole session. Minor intraday consolidation has been bought into and Nifty closed near the highs. The opening upside gap remains unfilled.

A long bull candle was formed on the daily chart, which indicates an attempt of upside breakout of the hurdle after a small dip. The recent swing low of 19333 could now be considered as a crucial bottom reversal pattern for the short term.

Bullish inverted head and shoulder pattern was formed on the daily chart and the Nifty is currently placed at the neckline of the pattern at 19700 levels. This is positive indication and a decisive upside breakout could open sharp upmove for the Nifty ahead.

Conclusion: The positive chart pattern like higher tops and bottoms has started to form and Monday's swing low of 19480 levels could now be considered as a new higher bottom of the sequence. A decisive move above 19700 levels is likely to bring sharp upmove for the market towards 19950-20050 levels for the short term. Immediate support is placed at 19550 levels.

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