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Daily Technical View on Nifty

Emergence of selling from new highs..

Observation:

After showing upmove with range bound action in the last few sessions, Nifty slipped into profit booking from the new highs on Wednesday and closed the day lower by 108 points with lower-level recovery.

After opening at the new all-time highs of 24461 levels, the market slipped into weakness in the early part of the session. Intraday upside recovery has emerged from the lows in the mid to later part of the session and Nifty closed the day off the lows.

A reasonable negative candle was formed on the daily chart with long lower shadow. Formation of Wednesday's negative candle has engulfed the small bull candle of Tuesday. This market action could be considered as a bearish engulfing pattern (not a classical one). Normally, such bearish candle formation at the highs or at the hurdle indicates caution for bulls for impending reversal pattern, post confirmation.

The market has sustained above the immediate support of 10-day EMA around 24180 levels. This moving average has been offering support for the Nifty in the last one month.

Conclusion: The near-term uptrend status of the market remains intact. But the market seems to have started signs of profit booking around 24400-24500 levels. However, a move above 24465 could negate this bearish setup. Immediate support is at 24150 levels.

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