Technical View - Oct 22, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Nifty continued to show range bound action with volatility on Thursday and closed the day higher by 41 points. Nifty opened today on a negative note and later shifted into a narrow intraday high low range for the entire session. Intraday volatility was seen for the day and the market managed to show minor upside recovery towards the end.

A small positive candle was formed with upper and lower shadow, which indicate a formation of high wave type candle pattern. Having formed this high wave pattern beside the long range candle of Wednesday could indicate a sideways range movement in the market.

The short term 10 period exponential moving average has been offering support of the Nifty, after its downside violation of 15th Oct. The market showed upside recovery from the lows of this support in the last two sessions.

After the formation of bearish engulfing pattern of 15th Oct, Nifty has failed to show any weakness below this pattern (11661) in the last five sessions. Technically this could be a positive signal for the bulls to maintain a upper levels. Presently the high low area of that engulfing pattern is acting as a band for the Nifty around 12025-11660 levels.

Conclusion: The short term trend of Nifty is range bound with minor weak bias. There is a possibility of continuation of range bound action around 11850-11950 levels by next session. Immediate supports to be watched at 11800 and crucial upside hurdle is placed at 12025.

Source : Equity Bulls

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