Technical View - Nov 17, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: Arizona, USA)
The upside momentum continued in the market from a Diwali-Muhurat trading session, after a minor pause and Nifty closed the day (Tuesday) with another handsome gains of 93 points. After opening on a positive note, the market shifted into a narrow high low range for the whole session. Minor intraday dips was used to move up slightly and new all time high was registered on Tuesday at 12934 levels.
A small negative candle was formed at the highs with lower shadow, which signal buy on dips in the market amidst a range movement. The market breadth was slightly positive and broad market indices like midcap 100 and small cap 100 have ended higher by 1.11% and 0.26% respectively.
Nifty continued its uptrend for three consecutive sessions, after a pause of one session (12th Nov). We observe smaller degree of higher tops and bottoms on the daily chart and a recent dips in the market of 13th Nov could be considered as a new higher bottom of the sequence. Hence, a present upmove could continue for another 1-2 sessions before showing another higher top at the new highs.
Nifty has reached the long term resistance of significant uptrend line (trend line connected the rising tops of the last two year-as per weekly/monthly chart). Presently, Nifty is making an attempt of breaking above this crucial overhead resistance at 12850 levels. Any slowing down of upside momentum around this area could bring some profit booking from the highs and a decisive/ sustainable move could open the next upside target of 13500 levels.
Conclusion: The short term trend of Nifty continues to be positive. The market is now placed at the make or break area of 12850-12900 levels in the short term. Inability to generate further strength in the upside momentum could result in a minor weakness from the highs in the next 1-2 sessions. A decisive move above this hurdle could open the next upside target of 13500 for the next couple of weeks.