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Daily Technical View on Nifty

Continuation of weakness..

Observation:

After showing sharp upside recovery from the lows on Tuesday (Union Budget day), Nifty continued with weakness amidst a range movement on Wednesday and closed the day lower by 65 points. After opening with a negative note, Nifty showed further decline in the early to mid-part of the session. Upside recovery has emerged from the day's low and Nifty finally closed the day lower. A small negative candle was formed on the daily chart with minor upper and lower shadow, which reflect volatility in the market. Technically, this pattern signals a formation of high wave type candle pattern after a reasonable decline from the new highs. Immediate support of 10day EMA has been broken on the downside and Nifty is currently placed near another support of 20day EMA around 24270 levels. These moving averages have been upheld in the last 5- 6 weeks and the market's inability to sustain above these supports could eventually open sharp weakness ahead. However, the formation of bullish hammer and the high wave back-to-back in two sessions could signal temporary halt in sharp downside momentum. A sustainable move above 24580 levels could only confirm near term bottom reversal pattern.

Conclusion: The short term trend of Nifty continues to be weak. Further weakness from here could find lower supports around 24270-24100 and one may expect emergence of buying from the lows. Immediate hurdles to be watched around 24580.

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