Technical Observation - May 13, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After witnessing a sharp upside bounce from the lows in the last session, Nifty shifted into a sharp upmove on the opening today and followed by range bound action in the better part of the session. Nifty closed the day higher by 2.03%. A long negative candle was formed at the highs and the opening upside gap has been filled partially. This gap up opening was mainly on the back of huge economic package announcement by PM in last evening.

Nifty failing to sustain the opening gains may not be a good sign with regards to this economic package news. But, the clarification of this package could decide the trend for the near term.

Technically, the bearish island reversal, that formed on 4th May is still intact and both the up and down gaps are unfilled. As long as the last down gap of this pattern remains open at 9730 levels, the negative impact of this pattern can't be ruled out.

The short term trend of Nifty is positive. The key overhead resistance to be watched for short term around 9580-9730 levels. A sustainable move above this area could open up a sharp upside momentum in the market ahead. Any failure to move above this hurdle is likely to result in minor downward correction. Immediate support is now placed at 9225.

Source : Equity Bulls

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