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Daily Technical View on Nifty

Sharp breakdown of the supports.. 

Observation: After showing range bound movement with weak bias on Friday, Nifty witnessed sharp sell off on Monday and closed the day lower by 260 points. After opening with a weak note, the market made an attempt of minor upside recovery soon after the opening. Sharp weakness got triggered from the early part of the session and the decline intensified in the later part of the session.

Nifty closed near the lows. A long bear candle was formed on the daily chart, which indicates sharp break down in the market. Nifty has broken below the immediate supports of 19480 and 19330 levels in one session. The weekly crucial support of 20 week EMA has been broken on the lower side at 19340 levels as per intra-week.

The larger degree of lower tops and bottoms continued in Nifty as per daily timeframe chart. The recent swing high of 19849 of 17th Oct could now be considered as a new lower top of the sequence. Hence, one may expect further weakness in Nifty to form a new lower bottom of the pattern.

Conclusion: The short term trend of Nifty continues to be negative. Having moved below the support of 19330, one may expect Nifty to slide down to 18825 levels-200 day EMA in the near term. Any attempt of upside bounce could encounter strong resistance around 19400 levels. 

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