Technical View - April 7, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: Arizona, USA)
After showing consolidation movement on Tuesday, Nifty witnessed a sustainable upmove on Wednesday and closed the day higher by 135 points. After opening on a positive note, Nifty showed minor knee-jerk action soon after the opening. A sustainable upmove has emerged in the market till afternoon, before showing another round of consolidation movement at the highs.
A long positive candle was formed on Wednesday on the daily chart with lower and minor upper shadow. Technically, this pattern indicate an upside bounce in the market after one session of sharp weakness of Monday. The crucial overhead resistance of 14880 levels (resistance as per change in polarity) came into scene on Wednesday, as Nifty retested the hurdle by forming a day's high of 14879, before showing minor weakness from the highs.
Previously, in the three occasions the Nifty has witnessed sharp downward reversal from near this resistance area (14880) in subsequent sessions, after closing at the edge of this area in previous sessions. The Nifty has closed again at the edge of this hurdle on Wednesday (made a high of 14879) and there is odds of down side turnaround of Nifty from the highs, as happened in the past. But, a sustainable move above 14900 levels could bring sharp upside momentum back into action.
The formation of broader range movement with one day of declines just below the hurdle and a formation of consistent higher lows in last three daily candles could signal possibility of minor weakness or consolidation movement around 14900 levels before showing a sharp upside breakout in the next 1-2 sessions.
Conclusion: The short term trend of Nifty is positive with range bound action. The market is now placed near the make or break - crucial area of 14900 levels. The short term chart pattern indicate minor intraday weakness or consolidation movement around 14880 levels before showing a sustainable upside breakout in the short term. Immediate support is placed at 14730.