Technical View - Sep 29, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a fine upside bounce in the last couple of sessions, Nifty shifted into a consolidation with volatility on Tuesday and closed the day on a slight negative note. A small negative candle was formed with lower shadow and the opening upside gap has been filled completely. This indicate minor profit booking at the highs.

Nifty is placed at the immediate resistance of trend line, as per change in polarity at 11240 and has struggled to sustain above that area on Tuesday. The complete filling of opening upside gap also signal a possibility of more consolidation with negative bias in the short term.

The recent upside bounce from the lows of 10800 could be considered as an upside bounce of a down trend and this up leg is expected to form a new lower top around 11300-11400, if it sustains above 11250 levels in the near term. Tuesday's consolidation could rather signal a pause of a sharp upside bounce, than any sharp negative reversal at the highs.

Though, Nifty closed on a slight negative note, the overall market breadth has turned into negative with broad market indices like mid and small cap segments of NSE exchange closing on a minor negative note.

The broader negative chart pattern as per weekly chart is still intact and any upside bounce from here could be considered as a sell on rise opportunity in the near term.

Conclusion: The short term trend of Nifty is positive with range bound movement. Further consolidation or narrow range movement is likely in the next 1-2 sessions with volatile intraday swings. Immediate support is placed 11180 and a sustainable move above 11250 levels could pull Nifty towards the next 11300-11400 range for the near term.

Source : Equity Bulls

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