Technical View - Aug 25, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Nifty struggled to sustain the new swing highs on Tuesday, as it shifted into a narrow range movement and closed the day on a small gains of 05 points. A small negative candle was formed with minor lower shadow. Nifty made a new swing high of 11525 on Tuesday and showed minor intraday weakness from the highs. This pattern indicate a choppy movement in the market at the highs.

Nifty is placed at the crucial upper levels of 11500-11600 levels (resistance as per weekly chart) and is struggling to sustain the new swing highs. But, there is no indication of any reversal pattern at the highs and there is absence of sharp intraday weakness from the hurdles.

The high low range of Nifty on the daily chart is getting narrowed at the highs. The time consumed after the higher highs and higher lows have been squeezed significantly at the higher levels. Such patterns more often signal that the significant reversal pattern is near by. But, timing the reversal pattern could be tricky.

The underlying uptrend status remains intact and there is no signal of any reversal pattern at the highs. Long trading positions needs to be protected with stoploss of 11290. At the same time, a sustainable move above 11600 could open further upside in the near term.

Source : Equity Bulls

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