Technical View - Sep 15, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing higher levels weakness on Monday, Nifty showed an upside bounce with range bound action on Tuesday and closed the day on a decent gains of 81 points. A reasonable long candle was formed with minor lower shadow, which signal upside bounce in the market.
After the formation of negative candlestick pattern of Monday, Nifty showing upside bounce today could signal a possibility of a retest of the upside resistance around 11570-11600 levels in the short term. A sustainable move above 11600 could have further positive impact on the market.
Nifty is moving in a broader range and has witnessed selling pressure consistently at the highs. It is going to be crucial to watch the market behavior at the hurdle of 11600. As long as the swing high of 31st Aug (11794-high of bearish engulfing as per daily and weekly chart) is protected, the broad based upside momentum could be muted in the near term.
The short term trend of Nifty is range bound with positive bias. Renewed buying enthusiasm could only occur above 11600 and that is likely to pull the market towards 11800 levels in a quick period of time. Important lower supports to be watched at 11380 and a breach below this support could trigger more weakness in the near term.