Technical View - Jan 11, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: Arizona, USA)
The upside momentum continued in the market for the second consecutive session on Monday post upside breakout of small range of Friday at 14250 and the Nifty closed the day higher by 137 points. After opening on a positive note on Monday, the market shifted into a consolidation in the early part of the session. It later showed a gradual upmove with range in the later half and finally closed near the all time high. The opening upside gap remains partially filled.
A small body of positive candle was formed with long lower shadow. Technically this pattern indicate buy on intraday dips opportunity in the market. The long bull candles of Friday and Monday signal an upside breakout of the small range at 14250 levels. New all time high was formed at 14498 levels.
The symmetrical pattern of 17-18 sessions of time consumption before sharp one day drop is intact. After the recent one day drop of 21st Dec, 14 trading sessions have already been consumed. Hence another 3-4 sessions of time consumption by the way of upmove or range movement is expected in this week, before showing another round of one day sharp decline from the highs-as per Nifty daily timeframe chart.
Another pattern of 3 weekly long bull candle formation is intact as per Nifty weekly timeframe chart. After a sharp weakness of later Dec-20, two weekly bull candle is already over and third week is in progress. Hence, this weeks high (high of long bull candle) is going to be crucial for any profit booking from the highs.
Conclusion: The short term trend of Nifty continues to be positive. There is a possibility of some more upmove or range movement for the next 3-4 sessions, before showing sharp one day of decline from the new highs. The next upside levels to be watched at 14600-14800. Immediate support is placed at 14380.