Technical Observation - April 9, 2020 - Nagaraj Shetti - Technical Analyst, HDFC securities

After witnessing a high volatility on Wednesday, Nifty shifted into a sharp upmove on Thursday and closed the day on a smart gains of 363 points. A reasonable positive candle was formed on Thursday with gap up opening and the opening upside gap remains unfilled. Nifty is currently placed at the upside breakout of the key overhead resistance of around 9150-9200 levels (previous swing highs).

On the daily chart we observe a positive sequence of higher tops and bottoms and Nifty is currently placed near the higher top (but top reversal needs to be confirmed to call this as a reversal). Daily 14 period RSI has moved above 40 and its next upside trajectory is at 60 (from a current levels of 47)

A long bull candle was formed in last week (as per weekly timeframe chart), after a consolidation pattern of previous week.This pattern indicates a strength of an upside bounce and signals that the important swing low of 7511 (24th March) could be a crucial bottom reversal.

The overall trend of Nifty continues to be positive. Having moved up sharply, minor profit booking can't be ruled out from the highs of 9200-9300 levels by this week, which could be a buy on dips opportunity for the near term. A sustainable move above 9200-9300 could take Nifty towards the further higher levels of 9800-10000 levels in the next few weeks.

Source : Equity Bulls

Keywords