Technical View - Sep 3, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
2021-09-03 18:16:28 (Time Zone: IST)
Nifty witnessed upmove for back to back 2nd session on Friday, post minor negative pattern of 1st September and closed the day higher by 89 points. After opening on a positive note, the market witnessed high volatility for the day. Sharp intraday dips have been used as a buy on dips opportunity. Nifty registered a new all time high at 17340 levels and closed near the highs.
A reasonable positive candle was formed on the daily timeframe chart at the new all time highs, which indicate a sharp uptrend continuation pattern. Though, Nifty placed near the swing highs, still there is no indication of any tiredness or reversal pattern unfolding at the highs. This is positive indication and one may expect further upside in the short term.
The sharp up trended movement can be observed in the Nifty as per daily timeframe chart over the last 5-6 sessions, as compared to minor degree of higher highs and lows of past. The slope of the present upmove is little vertical at this point. This market action signal probability of buying euphoria unfolding at the higher levels. Normally, such euphorias are part of last rising legs and produces ultimate reversals. But, we need confirmation of completion of this strong uptrend to call any reversal.
Nifty on the weekly chart has witnessed a sharp upside breakout of narrow range movement of the last three weeks. This is positive indication and one may expect intraday volatility at the higher levels in coming sessions.
Conclusion: The short term trend of Nifty continues to be positive and the upside momentum is at its high. There is a possibility of further upside in Nifty for the next week towards 17500-17600 levels. The crucial supports like daily 10 period and 20 period EMA is placed around 17260 and 17200 levels respectively.