Technical View - Aug 2, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a lack of strength to sustain the highs on Friday, Nifty witnessed a sustainable upmove on Monday and closed the day higher by 122 points. After opening on an upside gap of 111 points, Nifty shifted into a gradual upmove with range bound action for the whole session. Intraday dips of mid to later part was used as buy on dips opportunity for the day. The opening upside gap remains unfilled.

A small positive candle was formed with long lower shadow and gap up opening. This pattern signal an emergence of strength in the market to sustain the higher levels, after choppy movement of last few sessions. This is positive indication and one may expect further upside.

The Nifty is now placed at the edge of an upside breakout of the immediate resistance of around 15860-15880 levels (previous swing highs and down gap of 19th July). Hence, there is a possibility of upside breakout of immediate resistance. A sustainable move above 15880 is likely to pull the market towards the next round of upside in the near term.

The uptrend status of Nifty as per long term charts like weekly and monthly is intact. The formation of consistent long lower shadows in the last three weekly candle indicate higher chances of upside breakout of the broader range movement.

Conclusion: Bulls seems to have comeback, after a lackluster type movement of last few sessions. A sustainable move above the initial hurdle of 15880 levels is expected to pull the Nifty towards the next crucial area of 15960-16000 and higher in the short term. Immediate support is placed at 15830 levels.

Source : Equity Bulls

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