Technical View - Oct 14, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a consolidation type of movement in the last couple of sessions, Nifty witnessed sharp intraday weakness and also an excellent upside recovery on Wednesday and finally closed the day higher by 36 points.

We observe a formation of small positive candle with long lower shadow, which indicate a sharp intraday upside bounce, after a steep decline of early part of Wednesday. This market could be a cheering factor for bulls to make a comeback, after a short pause in the market. But, the overall market breadth continued with weak trend and broad market indices like mid and small cap segments have failed to show any reasonable upmove.

The uptrend of the last couple of weeks remains intact and Wednesday's sharp upside bounce could be another evidence of strength of upside momentum. The whole chart pattern as per daily timeframe could be considered as an uptrend continuation and Nifty is expected to surpass above the 12K mark soon.

The formation of long lower shadow in the last 3-4 daily candle could be a signal emergence of buying interest from the immediate supports. The pattern of daily 14 period RSI signal that further upside momentum in the market could be picked up soon.

Conclusion: The near term uptrend status of Nifty continues to be positive. The market is likely to continue its upside momentum above 12K mark, after a pause of last two sessions. The near term upside target of 12250 remains intact and immediate support is now placed at 11825.

Source : Equity Bulls

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