Technical View - Feb 24, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: Arizona, USA)
After showing a consolidation movement on Tuesday, Nifty witnessed a hefty gains on Wednesday and closed the day higher by 274 points. After opening on a positive note, Nifty made an attempt to move up in the early part of the session. Meanwhile, the trading in NSE Exchange has halted due to technical glitch at 11.40 am and the market re opened at 3.45 pm, post which resulted in sharp upside movement in the market and Nifty closed near the highs in extended hours.
A long bull candle was formed, which indicate an upside bounce in the market. Formation of two long range candles of 22nd- bear and 24th March-bull with small negative candle of 23rd Feb, which signal chances of bullish reversal in the market. This pattern needs to be confirmed with further upmove in the subsequent session.
The recent downtrend in the market has reversed after consuming 5 sessions of weakness and one session of consolidation movement. This market action is similar to the previous six sessions of decline which occurred in the later part of January and resulted in a sharp upside bounce during union budget 21. This is positive indication and if this reversal pattern gets confirmed in a day or two, then one may expect continuation of upside momentum in the market.
Conclusion: The short term downtrend trend of Nifty seems to be placed at the verge of reversal and further upmove is expected to confirm this turnaround in the market. Further sustainable upmove could confirm reversal pattern and that could pull Nifty towards 15430 levels again. On the flip side, any failure to sustain the gains could bring Nifty back to the support of 14650 in the near term.