Technical View - Oct 23, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Sideways range movement continued in the market on Friday and Nifty closed the day higher by 33 points. After opening on a positive note on Friday, Nifty continued to move in a narrow high low range for the entire session. Minor intraday weakness has filled the opening upside gap completely.

A small negative candle was formed with minor upper and lower shadow. Technically, this pattern indicate a formation of high wave or spinning top type candle pattern. But having formed this pattern in a range movement, the pattern implication regards to underlying trend of the market could be less.

Though Nifty witnessed a range movement on Friday, the overall market breadth was positive and broad market indices like midcap and small cap segments have closed higher by 0.79% and 0.62% respectively. this is positive indication.

Nifty on the weekly chart formed a small positive candle with upper and lower shadow, which is similar to a high wave type pattern. This candle pattern was formed beside the negative candle of previous week. The upper area of 12025 has been acting as a key overhead resistance in the last couple of weeks and this hurdle could be tested again in the coming week. A sustainable upside breakout of this hurdle could have a sharp positive impact on the market ahead.

Conclusion: The short term trend of Nifty continues to be range bound and the near term uptrend status remains intact. There is possibility of retest of 12000-12050 levels by next week, before showing minor profit booking again from the highs. A decisive move above this hurdle could open next upside levels of 12250 levels and higher in the near term. Immediate support is placed at 11825.

Source : Equity Bulls

Keywords