Technical View - May 7, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The upside momentum with range bound action continued in the market for the third consecutive sessions on Friday and Nifty closed the day higher by 98 points. After opening on a positive note, Nifty made an attempt to move up in the early part of the session. It later shifted into an intraday range move, that continued till the end of the session. Minor intraday dips were used to buy and Nifty finally closed by showing minor intraday dip from the highs.

A small body of positive candle was formed on the daily chart with minor upper and lower shadow. Technically, this pattern could mean a doji or a high wave type candle pattern (not a classical one) after a reasonable upmove from the lows. Technically, this indicate caution for bulls at the highs and a negative close in the subsequent session could result in a minor reversal pattern. Hence, a sustainable move above this pattern at 14863 levels could suggest continuation of upside momentum in the market.

Nifty on the weekly chart formed a reasonable bull candle, as per week's close. Nifty moved above the downside sloping weekly trend line resistance this time by closing above 14700 levels, after a failed attempt of previous week. This is positive indication.

Conclusion: The upmove with range bound action of the last three sessions may not be a good sign for the strength of upside momentum and the upper area of 14900-15000 levels could act as a hurdle for the market. The short term uptrend status remains intact and one may expect further upside towards the hurdle by next week. A decisive move above 15 K mark could only open sharp upside momentum. Otherwise, one may expect next round of minor profit booking from the highs.

Source : Equity Bulls

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