Technical View - May 21, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing weakness down the crucial support of 14900 on Thursday, Nifty witnessed an excellent upside bounce on a Friday and closed the day higher by 269 points. After opening on an upside gap of 81 points (body gap, not a western gap), the market shifted into a sustainable upmove in the early to mid part of the session. The buying enthusiasm has picked up again in the later part of the session and Nifty finally closed near the highs.

A long bull candle was formed, which indicate a sharp upside bounce from the lower support. This pattern seems to have confirmed a sustainable upside breakout of the hurdle and also an upper range (15000-14200) at 15K mark. As per this pattern, potential upside pattern target of 15800 could open up and this could be achieved over the next few weeks.

The positive sequence of higher tops and bottoms continued as per daily timeframe chart and Thursday's low of 14884 could now be considered as a new higher bottom of the sequence. At the same time further rise from here could open chances of new higher top.

As per weekly chart, the Nifty has registered a nine weeks high at 15190 on Friday and closed at the highs. We observe an upside breakout of the downward slopping trend line at 14900, as per week's close. This is positive indication.

Conclusion: The short term trend of the market has turned sharply into positive, after a weakness of couple of sessions. The confirmation of upside breakout of the broader range as per smaller and larger timeframe charts and the overall positive set up could point towards the potential upside pattern target of around 15800 levels for Nifty, which could be achieved in the next few weeks. Intermittently, the higher highs and lows and minor downward corrections could be continued till the target is achieved. Immediate support is placed around 15100-15050.

Source : Equity Bulls

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