Technical Wrap - Feb 25, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a violent decline of 815 points on Thursday, Nifty made a sharp comeback on Friday and closed the day higher by 410 points. After opening with an upside gap of 268 points (body gap, not a western gap), the market made an attempt to move up in the early part of the session. It later shifted into a narrow intraday range movement in the mid to later part of the session. The opening upside gap remains unfilled.

A reasonable bull candle was formed on the daily chart, which indicate a sharp comeback of bulls from the lows. This pattern has partially erased the loss made on Thursday. After a decisive downside breakout of important support like uptrend line (connected rising swing lows) and 200 day EMA around 16700-16800 levels, the market bounced back smartly in the subsequent session and is now placed at the previous breakout point.

The significance of the support area around 16700-16800 levels could weigh high on the market at resistance in coming sessions and this could possibly act as a sell on rise opportunity. The recent lower top pattern could also hint at another lower top formation ahead.

Conclusion: The sharp comeback of market on Friday could be a cheering factor for bulls to make a comeback. But, the crucial overhead resistance of around 16700-16800 levels could be a tough task to sustain the highs. Further upside from here is likely to encounter the resistance in the short term and one may expect weakness emerging from the lower highs. Immediate support is placed at 16500 levels.

Source : Equity Bulls

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TechnicalWrap HDFCSecurities Nifty Sensex