Technical Wrap - Dec 20, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The sharp trended decline continued in Nifty for the second consecutive sessions on Monday and the market closed the day with massive loss of 371 points. After opening with a downside gap of 161 points, the market tanked down further in the early to mid part of the session. A smart upside recovery has emerged from the day's low of 16410 levels and the market finally closed the day by erasing some of intraday loss towards the end. The opening downside gap remains unfilled.

A long bear candle was formed on the daily chart with gap down opening and with lower shadow. Technically, this pattern indicate a display of sharp downside momentum in the market with minor upside recovery. Nifty has broken below the crucial support of 16700 levels as per weekly timeframe chart. This is negative indication and one may expect more weakness in the near term.

Nifty as per long term charts like weekly and monthly remains negative and the bearish pattern intact. Any upside bounce from the lows could be a sell on rise opportunity for the near term.

Conclusion: The market has been in a violent decline for short term and the overall chart pattern indicate more weakness ahead for the near term. Having moved down swiftly in the last few sessions, there is a possibility of a pullback rally from the lower levels and that could be a sell on rise opportunity. The next downside levels to be watched around 16200 (10 month EMA), which could be achieved in the next 1-2 weeks.

Source : Equity Bulls

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TechnicalWrap Nifty Sensex HDFCSecurities