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Daily Technical View on Nifty

Market: Observation

Markets ended higher on Friday. Nifty finally gained 63.2 points or 0.27% to close at 23,813.4. Broad market indices like BSE Mid Cap index ended lower, thereby underperforming the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: Near term trend is range bound

On Nifty 15 min chart, we can observe that Nifty opened on a positive note and after a brief upmove found resistance at the 23940 levels. The index then gradually moved lower to close near the lows of the day. The index thus remains stuck in a range between the 23647-23939 levels.

Nifty: Short term trend is DOWN

Daily timeframe indicates that Nifty has recently broken its supports of 24180-23873 and is in a short term downtrend. The index has pulled back last week with modest gains.

But remains stuck in a range between the 23647- 23939 levels. The 24005-24066 is another important resistance to watch as the Nifty would need to cross these levels for a pullback rally to emerge.

Momentum indicators like the 14-day RSI are declining though they have bounced back last week. With most of the sectoral indices too in downtrend, this increases the probability of the weakness continuing.

Sectoral indices that are showing strength are Nifty Pharma and FMCG indices. And IT is near the supports and could be a dark horse.

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