Technical View - Sep 7, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
2021-09-07 23:42:50 (Time Zone: IST)
After the formation of range bound action on Monday, Nifty shifted into a consolidation with weak bias on Tuesday and closed the day lower by 15 points. After opening on a positive note, the market showed intraday decline in the early to mid part of the session. A sharp intraday upside bounce has occurred from the lows in the mid part, but the market has failed to sustain the intraday gains and slipped into minor weakness again in the later part of the session. A new all time high was registered at 17436 levels.
A reasonable negative candle was formed on the daily chart with minor upper and lower shadow. This pattern signal volatile movement in the market within a narrow range. This indicate tiredness in the market at the new highs, but the overall chart setup is not alerting of any significant trend reversal pattern.
After the formation of spinning top type candle pattern at the highs on Monday, the market showing minor weakness with range bound action on Tuesday seems not a confirmation of any reversal pattern at the highs. The present chart pattern indicate minor consolidation of a sharp up trended movement and there is a possibility of bounce back in the market in the short term.
The overall market breadth was negative on Tuesday with broader market indices like mid cap and small cap of NSE have ended with minor loss of 0.29%, 0.09% respectively.
Conclusion: The market seems to have shifted into a consolidation mode with range bound action. The present choppy movement with minor weakness could continue for the next 1 or 2 sessions before showing another round of upside bounce from the lows. Immediate support is placed at 17250 and the crucial overhead resistance to be watched around 17500 levels.