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Daily Technical View on Nifty

Observation: After showing a sustainable intraday upside recovery from the lows on Wednesday, Nifty witnessed a reasonable upside bounce on Thursday amidst range bound action and closed the day higher by 109 points. After opening with an upside gap of 85 points, the market shifted into a narrow range movement for better part of the session. The opening upside gap has been left unfilled. 

A small positive candle was formed on the daily chart with gap up opening (type of high wave candle formation). The opening downside gap of Wednesday and the opening upside gap of Thursday are unfilled, which is indicating a formation of bullish 'island reversal' type pattern as per hourly/daily timeframe chart. This is positive indication for the short term and it opens potential upside pattern target of 19726 levels for the short term.

Conclusion: The broader negative chart pattern like lower tops and bottoms is intact as per daily timeframe chart and further upside from here could open chances of new lower top formation. 

The display of further strength in current upside bounce could possibly pull Nifty towards 19726 levels. Any failure to sustain the highs is expected to trigger fresh weakness from the lower highs

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