Technical Wrap - May 31, 2023 - HDFC Securities

Subash Gangandharan, Senior Technical and Derivative Analyst, HDFC Securities

Markets ended lower on Wednesday after a gap down opening. Selling was seen through the day. A recovery from the lows in the late afternoon session helped to curb the losses. The Nifty finally lost 99.45 points or 0.53% to close at 18,534.4. Broad market indices like the BSE Mid Cap and Small Cap indices gained more, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Zooming into 15 min chart, we observe that the Nifty opened with a down gap and then continued to move lower. In the process, it broke down from a two day range. While there was recovery from the lows in the late afternoon session, the very short term trend remains down. There was also a negative moving average crossover as the 20 period MA moved below the 50 period MA on the 15 min chart. Further downsides are now likely once immediate support of 18483 is broken.

On Daily chart, we observe that while Nifty has corrected on Wednesday, the pattern of higher tops and higher bottoms seen since the March 2023 lows has not been disturbed.This indicates that the intermediate uptrend remains intact. We expect the Nifty to find support around the previous swing high of 18459 before again resuming the uptrend. Of course, if this support fails to hold, then a further correction is likely.

Conclusion: The intermediate trend of Nifty remains UP. We expect the Nifty to find support around the previous swing high of 18459 before again resuming the uptrend. Of course, if this support fails to hold, then a further correction is likely.

Source : Equity Bulls

Keywords

TechnicalWrap HDFCSecurities Nifty Sensex