Charts indicate bullish strength on lower time frames

NSE Nifty bounced sharply from the 17,000 zone and closed positively. It closed at 17222, with a 69 points or 0.40 per cent gain. The Bank Nifty was up by 0.85 per cent. The Smallcap-100 and Midcap-100 indices are down by 0.73 per cent and 0.18 per cent, respectively. The Nifty IT and Pharma indices declined by 0.34 per cent each. The sector indices advanced by half a percent on average. The market breadth is positive as 1449 advances and 658 declines. About 175 stocks are traded in the lower circuit. About 67 stocks hit a new 52-week low and 61 stocks hit a 52-week high. Tata Elxsi, PVR and Adani Power were the top trading counters on Monday.

The benchmark index sharply bounced from the gap area support and protected the 200DMA support. It reclaimed the 50DMA too. After a positive opening, the index fell sharply lower and tested the 22nd March low. For the second time, the 17000 support area was protected. The Sharp recovery was limited to just one hour in the afternoon session with a higher volume. The volumes were again below the averages. The index traded mostly in the range of 12-1 pm hourly bar. The Nifty is still in the 17000-350 zone, and it needs to break the range for a decisive move. It bounced 220 points from the day's low and closed near to high point. This may show some bullish strength on lower time frame charts.

Interestingly, all the sector indices gained less than a percentage and the VIX is down by 3.5 per cent on a volatile move. The underperformance of broader indices is another factor of suspicion on the move. As there are only three days to expiry and the financial year is ending, the NAV management will be a key factor. The index may move in the zone for another day, as stated yesterday. A close above 17355-443 will test the 17700 levels. But, 17000 support look very strong for now; only below this, the fresh short opportunities will be available. For an intraday, 17250 will be key resistance.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)