Technical View - Nov 24, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: Arizona, USA)
After showing consolidation movement in the last few sessions, Nifty witnessed an upside breakout of the key overhead resistance of 12980 levels on Tuesday and closed the day higher by 128 points. After opening on a positive note, Nifty slipped into minor intraday weakness from the highs in the early part of the session, but later witnessed a sustained upmove for the better part of the session and the opening upside gap remains unfilled.
A reasonable positive candle was formed on the daily timeframe chart, that has closed at the new all time high of 13079 levels. This could be considered as an upside breakout of the minor consolidation at 12970 levels. Hence, one may expect continuation of an upside momentum in the market. Now, one need follow-through upmove in the market, post breakout for the next upside targets for the index. The overall market breadth was positive on Tuesday and the broad market indices like midcap 100 and small cap 100 indices have closed higher by 0.73% and 1.11% respectively.
Nifty on the weekly chart continued its upside momentum so far this week, after a small range movement of the last weeks. the long term resistance of up sloping trend line (top to top connected -as per weekly and monthly chart) now seems to be an upside breakout pattern. We need more evidence of upmove in the short term to call this as a decisive upside breakout of the trend line-weekly chart.
Conclusion: The upside momentum in Nifty seems to have picked up with a sustainable upside above the hurdle of 12970 levels. Further decisive upmove could have a sharp positive impact on the market and that could open the next upside targets of around 13500-13600 levels in the near term. Immediate support is now placed at 12950.