Technical View - July 23, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing higher levels weakness on Wednesday, Nifty continued with upside momentum with range bound action on Thursday and closed the day decently higher by 85 points. A small positive candle was formed and that has placed beside the negative candle of Wednesday. Technically, this action signal comeback of bulls after a small pause in the uptrend.
Nifty is now placed at the edge of moving above the key upper resistance of 11245 (opening downside gap of 6th March). Hence, a sustainable move above 11250 could have further positive impact on the market ahead.
The larger degree ascending triangle pattern has been broken on the upside at 10950 and the market sustained above it in the last few sessions. Nifty is now placed to surpass another key hurdle of 11250. This market action reflect ongoing sharp up trended movement in the market without any reasonable downside correction. Unless, we observe confirmation of any reversal at the highs, the underlying short term presumed to be up.
At the same, time key overhead resistance is placed at the highs of 11300-11500 range as per long term charts like weekly/monthly timeframe. Hence, a move above the present swing highs (11245) could encounter high volatility and intraday weakness in the short term.
The short term trend continues to be up, A sustainable move above 11250-300 levels is expected to pull Nifty towards the next overhead resistance of 11550-600 levels by next week. Immediate support is placed at 11050-11100 levels.