Technical View - July 27, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: UTC)
After showing weakness with range bound action in the last couple of sessions, Nifty seems to have strengthened its weakness on Tuesday and closed the day lower by 78 points. After opening on a positive note, Nifty made an attempt to move up in the early part of the session. It failed to surpass intraday hurdle of 15880-15900 and started to show sharp intraday weakness from the highs. Minor upside recovery has emerged from the lower support of 15700 levels towards the end.
Long negative candle was formed on the daily chart with minor lower shadow. This signal continuation of weakness in the market with range bound action. The opening downside gap of 17th July has been acting as a stiff resistance in the last three sessions.
In the last one month, Nifty showed maximum 3-4 sessions of decline during its broader range movement and the decline down to the lower area of 15600 has proved to be a good support for the market and resulted in an upside bounce. Having declined from the highs in the last three sessions, the odds of a decent upside bounce can be expected in the next 1-2 sessions.
On the weekly chart the 10w EMA has been offering support for the market in the last couple of weeks and the average is now placed at 15635 levels. Hence, further weakness could be a buy on dips opportunity for the market ahead.
Conclusion: The weakness with choppy trend continued in the Nifty and still there is no respite for bulls at the lows. The chart pattern of daily and weekly signal a possibility of an upside bounce in the market from the lows of around 15650-15680 levels in the next 1-2 sessions. On the higher side 15900 remains overhead hurdle for the near term.