Technical Wrap - Dec 21, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a sharp weakness in the last couple of sessions, the Nifty witnessed a reasonable upside bounce on Tuesday and closed the day higher by 156 points amid high volatility. After opening on an upside gap of 159 points (body gap, not a western gap), the market continued its upside momentum till the mid part of the session. Intraday weakness got triggered from the high of 16936 levels and the Nifty showed intraday weakness from the highs in the mid to later part of the session. The opening upside gap remains partially filled.

A small positive candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicate a formation of doji type candle pattern (not a classical one). This market action display weak upside bounce in the market.

The negative chart pattern like lower tops and bottoms continued in Nifty as per daily timeframe chart and Tuesday's upside bounce could be a part of new lower top formation. The market has witnessed sharp downward reversals from the higher resistances in the recent past. We expect the upper area of 17000-17100 levels to be a strong resistance in the short term.

Conclusion: The negative trend set up in Nifty is still intact and Tuesday's upside bounce has not changed the sentiment so far. There is a possibility of minor upside bounce towards 17000-17100 levels in the next few sessions and the market is expected to reverse down from the higher levels. Immediate support is placed at 16630 levels.

Source : Equity Bulls

Keywords

TechnicalWrap HDFCSecurities Nifty Sensex