Technical View - July 16, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing higher levels weakness on Wednesday, Nifty shifted into a decent upmove on Thursday amidst a range movement and closed the day higher by 121 points. Nifty opened today on a positive note and shifted into a narrow range movement for the better part of the session. It showed upside breakout of the intraday upper range towards the end.
On the daily chart, a small body of positive candle was formed with long lower shadow. Technically, this pattern indicates minor buy on dips action in the market.
We observe a broader range movement (overlapping candle formation in the last three sessions) and Nifty has been sustaining above the lower support of 10550-10600 levels in the last three sessions. Though, Nifty moved up smartly today, the overall market breadth was negative mainly due to an underperformance in the broader market indices like mid and small cap segments.
The multi month uptrend line (connected from March low) is intact around 10600-10650 and Nifty has been showing a broader range movement above this trend line support in the last three sessions. If Nifty fails to show sustainable move above 10800 levels in the next couple of sessions, then one may expect it to slide below the trend line support of 10600 levels.
The short term trend of Nifty is positive with range bound action. On the way up 10830-10900 is going to be a key overhead resistance for the market in the next few sessions. Important supports to be watched at 10600-10550 levels.