Technical Wrap - Feb 2, 2022 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The sharp upside momentum continued in the market on Wednesday after the Union Budget of Tuesday and the Nifty closed the day with decent gains of around 203 points. Nifty opened with an upside gap of 130 points and shifted into a gradual upmove with range bound action, which continued for the whole session. Intraday dips in between have been bought into and the market closed at the highs. The opening upside gap remains unfilled.

A long bull candle was formed on the daily chart with gap up opening. Technically, this pattern signal a continuation of sharp upmove in the market. The overall market breadth seems to have strengthened on Tuesday and the broad market indices like Nifty mid and small cap segments have registered more than 1% gains respectively. Though, Nifty placed at the swing high of current upswing, still there is no indication of any reversal pattern unfolding at the highs.

The present rise has surpassed just above the 61.8% Fibonacci retracement of the recent fall at 17780 levels. The larger up and down swings of Nifty since October 21 have violated important 61.8% retracements on either side, but failed to test 100%. Having just moved above the upper 61.8% retracements now, the Nifty is not expected to move up to 100% upward retracement at 18350 levels. This could mean there is a higher possibility of Nifty showing lower top reversal in the near term.

Conclusion:The short term trend of Nifty continues to be positive and there is no signs of any tiredness at the higher levels. The next upside to be watched around 18000 mark, before showing any weakness from the highs. Immediate support is placed at 17650 levels.

Source : Equity Bulls

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TechnicalWrap HDFCSecurities Nifty Sensex