Technical View - August 7, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing high volatility in the last couple of sessions, Nifty witnessed a narrow range movement on Friday and closed the day higher with minor gains.
Nifty continues to hit overhead resistance of 11225-250 levels in the last few sessions, but failed to show any sharp weakness from the overhead hurdle in the last two sessions. This could be a positive sign for further upside. Currently, the market is placed at the edge of this resistance area and a sustainable move above 11250 is likely to pull Nifty towards the next resistance of 11350 in the near term.
Nifty on the weekly chart formed a reasonable positive candle with minor lower shadow. We observe a broader range movement in the market over the last three weeks around 11000-11300 levels. Hence, Nifty showing such a broader range movement in the last few weeks, below another crucial resistance of 11350 could signal strength of bulls to hold on their defense. Such action could eventually result in an upside breakout of the hurdle (11350) in the near term.
The short term trend of Nifty is positive amidst a range movement. A sustainable move above 11250 could pull Nifty towards 11350-11400 levels in the next week. Immediate support to be watched at 11100 and an important lower support for trend reversal is placed at 10900.