Technical Wrap - Dec 31, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a consolidation type movement in the last couple of sessions, Nifty made an attempt to stage upside breakout of the hurdle at 17250 levels on Friday and closed the day higher by 150 points amidst a range movement.

A log bull candle was formed on the daily chart, which indicate an upside breakout of the hurdle of down sloping trend line (connected lower highs) at 17250 levels. This is positive indication and one may expect more upside in the short term.

The larger negative sequence like lower tops and bottoms is still intact as per daily timeframe chart and this bearish setup could only be nullified on Nifty surpassing above 17640 levels. Till then the current upmove could be considered as a pullback rally of a down trend. The recent upside bounce has started with minor positive chart pattern like higher highs and higher lows, which indicate a increasing strength of upside bounce.

The long term charts like weekly indicate an upside bounce from the lower supports and monthly signal an upside bounce after a reasonable decline and the extreme long term chart like quarterly has closed with doji or high wave type formation, which means confusion state of mind at the highs.

Conclusion: The short term trend of Nifty continues to be positive and one may expect further upside in the short term. A sustainable move above 17640 is likely to negate the bearish setup and that could open more upside as per daily and weekly timeframe chart. Immediate support is placed at 17260 levels.

Source : Equity Bulls

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TechnicalWrap HDFCSecurities Nifty Sensex