After showing weakness with high volatility on Thursday, Nifty witnessed upside bounce with range bound action on Friday and closed the day higher by 66 points. After opening with an upside gap of 52 points, the market made an attempt to move up in the early part of the session. The intraday weakness got triggered from the day's high of 17905 levels and the opening upside gap has been filled completely. Minor upside recovery was emerged in the mid to later part and the market closed near the upper end of the day's range.
A small body of positive candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicates a formation of high wave type candle pattern. Normally, this formation reflects ongoing volatility in the market.
After a decisive upside breakout of the resistance of down sloping trend line at 17500 levels recently, the underlying showing consolidation and retracing down to the prior upside breakout point is normal course of action of a trended upmove. The Nifty is now placed at the support of up sloping trend line around 17600 levels.
Nifty on the weekly chart formed a long bull candle as per week's close and registered gains for third consecutive weeks. The present weekly market action indicate a negation of bearish weekly pattern of lower highs and lower lows. This is positive indication.
Conclusion:The underlying short term trend of Nifty remains positive with high volatility. The uptrend strength remains intact and we are unlikely to see any sharp trended decline from here. Any weakness from here could be a buying opportunity around the crucial support of 17600 levels and we expect further upside from the lower levels. Immediate resistance is placed at 17900.