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

After showing range bound action on Friday, Nifty shifted into a gradual upmove with choppy trade on Monday and closed the day higher by 81 points. After opening on an upside gap of 55 points, Nifty showed intraday consolidation after the opening and filled the opening upside gap. A gradual upmove has witnessed later in the mid to later part and the market finally closed near the highs.

A small positive candle was formed with lower shadow, which indicate range bound action in the market with buy on dips opportunity. We observe three back to back such candles over last three sessions and this indicate a breather type formation in the market.

Nifty registered a new all time high on Monday at 15773 and still there is no indication of any profit booking emerging from the new highs. The overall market breadth continued to be positive and performance was seen in the broad market indices like midcap and small cap segments. This could mean a display of inherent strength and lack of selling enthusiasm at the new highs.

Daily RSI is placed at 70 and is on a flat mode and there is no indication of any negative divergence developing at the highs. Hence, any turn up of daily RSI from here could mean further upside in the underlying Nifty.

Conclusion: The short term trend of Nifty continues to be positive with range bound movement. There is a possibility of further upside in the coming sessions. The next upside levels to be watched around 15950-16000 levels and this could be achieved in the one week. Immediate support is placed at 15650.

Source : Equity Bulls

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