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

After showing a promising upside bounce from the lows on Thursday, Nifty shifted into a choppy trend on Friday and closed the day lower by 18 points. Nifty opened Friday on a minor positive note and showed a range bound movement for the whole session. Minor intraday dips have sustained with upside recovery towards the end and Nifty closed the day on a slightly negative note.

A small negative candle was formed with minor lower shadow. This pattern could indicate a sideways range movement at the highs. The formation of bearish engulfing pattern of 25th Nov is still intact. Unless Nifty moves above the high of that pattern at 13145, consolidation movement or a minor weakness from the highs could be expected in the short term.

Nifty on the weekly chart has formed an interesting pattern like doji at the new all time high of 13145. Normally, a formation of doji after a reasonable upmove could indicate alert of trend reversal post confirmation of weakness in the subsequent weeks.

The doji pattern was formed just above the crucial long term resistance of ascending trend line (uptrend line connected from top to top-weekly/monthly chart), which signal chances of downward correction below the trend line support of 12800 levels.

Conclusion: The short term trend of Nifty is choppy and the market is expected to move in a range of 13100-12800 levels by next week. The study of long term charts like weekly and monthly timeframe signal crucial overhead resistance for the market around 13100-13150 levels. The lower area of 12850-12750 is going to be an important base for the Nifty and a decisive move below this area could open a sharp downward correction in the market.

Source : Equity Bulls

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