Technical View - Oct 27, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a sharp weakness on Monday, the Nifty witnessed an excellent comeback on Tuesday and closed the day decently higher by 121 points. After opening on a slightly positive note on Tuesday, Nifty slipped into minor weakness soon after the opening. A sustainable up move has emerged from a early part, which lasted till the later part of the session. Intraday minor consolidations have given a buy on small dips opportunity.

A reasonable positive candle was formed on Tuesday, that placed just beside the long negative candle of Monday. Technically, this pattern signal a smart comeback of bulls from the lower levels. In the last few occasions, the formation of such long bear candles have failed to show any reasonable follow-through declines after its formation.

Hence, the upside bounce of Tuesday after a long negative candle of previous session could mean a possibility of more upside in the market. This signal an inherent strength of bulls below the key overhead resistance of 12K mark. Such repeated actions below this hurdle could eventually open doors for a decisive upside movement above 12000 mark in the near term.

The important long support is intact for the market as per weekly timeframe chart around 11650-11600 levels (intermediate trend line, as per the concept of change polarity). Nifty is currently placed in a range movement on the weekly chart.

Conclusion: The upside bounce of Tuesday could be another evidence of comeback of bulls after a sharp weakness. As happened in the past, one may expect further upside in the market for the short term and possible retest of 12000 mark in the next few sessions. Immediate support is placed at 11710 levels.

Source : Equity Bulls

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