Technical View - Sep 28, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After witnessing a sharp upside bounce from the lows on Friday, Nifty continued to display strength on the upside on Monday and closed the day decently higher by 177 points. A long bull candle was formed with opening upside gap and the said up gap remains unfilled. This is positive indication and if this gap remains unfilled for the next 2-3 sessions, then that could mean more upside for the near term.

Nifty is currently placed at the minor trend line resistance around 11250 and this hurdle is expected to be broken on the upside by next session. After this hurdle, one may expect 11350-11400 as crucial overhead resistance for the near term.

The bearish negative pattern of lower tops and bottoms is intact and present upmove could be a part of a new lower top formation. We need reversal at the lower highs to call this as a lower top reversal pattern.

The formation of lower highs can be observed on the weekly chart, after the formation of long bear candles. Post formation of bearish engulfing with long bear candle in the early Sept 20, the market made an attempt to move up for the next couple of weeks and failed to sustain.

Hence, present upside bounce attempt. after the formation of another long bear candle of last week could signal unfolding of similar action. There is a possibility of some more upside or range move in the next few sessions, but the Nifty is unlikely to sustain the highs.

Conclusion:The short term trend of Nifty continues to be positive. There is a possibility of some more upside or range bound movement in the next few sessions. The present upside bounce could stretch up to maximum 11400-11500 levels by this or next week, before showing next round of weakness from the highs. Immediate support is now placed at 11050.

Source : Equity Bulls

Keywords