Technical Observation - May 22, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing higher levels weakness in the last session, Nifty showed declines amidst a range movement today and closed the day lower by 67 points. A small negative candle was formed today with upper and lower shadow. Technically, this pattern indicates range bound movement in the market with weak bias. The minor negative sequence of lower highs and lows is continued on the daily chart and last sessions high of 9178 could now be considered as a lower high. Hence, minor weakness could be expected in the next week.

Nifty as per weekly chart formed a small negative candle with long lower shadow. Technically, this pattern signals hammer type formation (not a classical one). But, the overlapping reasonable negative candles of the last few weeks (previous to this hammer pattern) could signal a possibility of a sharp upside bounce soon in the market from here or from the lows.

The short term trend of Nifty is negative with range bound action. Some more minor weakness is likely in the early next week, but, there is a higher possibility of a sharp upside bounce from the lower levels. Immediate support is placed around 8800-8850.

Source : Equity Bulls

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