Technical View - June 9, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing upmove with range bound action in the last four session, Nifty witnessed sharp profit booking from the highs on Wednesday and closed the day lower by 104 points amidst a volatile movement. Nifty opened on a positive note, made an attempt to move up in the early to mid part of the session. Another new high was registered at 15800 levels and sharp intraday weakness got triggered in the afternoon to later part of the session. A mid part intraday upside recovery attempt was not successful.

A long bear candle was formed on the daily chart after many sessions of small range movement on the upside. Technically, this pattern indicate an emergence of profit booking in the market from the new highs. This pattern could signal a formation of reversal pattern and a follow-through weakness from here is expected to confirm the reversal and that is likely to trigger more weakness in the market.

The positive sequence of higher highs and higher lows comes into picture now and present weakness could be in line with the formation of new higher bottom. On the other side, the market has been in a sharp trended upmove over the last 15-16 sessions and one day declines have been used to move up further during this period. As per this pattern, there is chance of Nifty bouncing back from the lows in the next session.

Conclusion: Wednesday's decline seems to have dampen the effort of bulls to sustain the highs. The formation of long bear candle at the new highs open chances of reversal pattern. But, follow through weakness in the subsequent session is expected to confirm the reversal and that could open more weakness for the short term. Crucial supports to be watched at 15560 and a decisive move below this area is expected to drag the market to lower 15400 levels.

Source : Equity Bulls

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