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Daily Technical View on Nifty

Market: Observation

• Markets ended with modest gains after a volatile session that saw the Nifty swinging in both directions. Nifty finally gained 28.45 points or 0.14% to close at 19,811.85. Broad market indices like BSE Small Cap index ended lower, thereby under performing the Sensex/Nifty. Market breadth was negative on BSE..

Nifty: Reverses near term weakness

• Zooming into 15 min chart, we observe that Nifty broke its intraday supports in the morning session. But quickly recovered in the afternoon session to close near previous session’s highs.

• In the process, the Nifty has now closed above the 20 and 50 period MA on the 15 min chart after dipping below it in the morning session. A move above 19829 could lead to further upsides and a testing of recent highs of 19875.

Nifty: Short term trend remains UP

• On the daily chart, Nifty remains in a healthy short term uptrend. We can observe that the Nifty has recently bounced back from the 200 day EMA. The uptrend was confirmed when the Nifty crossed the previous swing high of 19234. It has since then been making higher tops and higher bottoms and is now above the 50 day SMA. 14 day RSI is at 62.02, which is not overbought, implying scope for more upsides.

• While we expect Nifty to test the recent intermediate high of 19875 in the coming sessions, short term weakness is not ruled out. Key levels to watch for a reversal of current uptrend are the recent lows of 19579.

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