Technical View - July 10, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing a fine upside recovery from the lows in the last session, Nifty failed to continue with upside momentum on Friday, as it slipped into weakness by around 45 points. A high wave or doji type candle pattern was formed within a broader range of 10830-10700 levels. Normally, impact of doji patterns gets nullified during range movement.
The opening upside gap, which was created on 6th July at 10700 remains intact and is offering support for the Nifty in the last four sessions. But, Nifty failed to show any significant upmove from this support area.
Nifty as per weekly chart, formed a spinning top type candle pattern at the swing high of 10847, as per week's closing. This pattern could be an alert signal for bulls at the higher levels. Normally such patterns at the important swing highs and followed by long bull candles are the candidates for the reversal patterns. Hence, a sustainable move only above 10850 could open further upside in the market.
The short term trend of Nifty is range bound with weak bias. The overall daily / weekly chart pattern indicate a possibility of reversal in Nifty around 10800 levels in the coming week. Beginning of decline from the highs is likely to bring bears into action. Important supports to be watched for the resumption of weakness is at 10700. Any upside bounce could find stiff resistance around 10800-10850 levels.