Technical Wrap - Feb 28, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing an excellent comeback on Friday, Nifty displayed another attempt of sharp upside bounce from intraday lows on Monday and closed the day higher by 134 points amid a large intraday range. After opening on a downside gap of 177 points, the market slipped in to further weakness soon after the opening. A sustainable intraday upside bounce has occurred from the lows of 16356 levels in the early-mid part and the upside momentum got strengthened towards the end and Nifty closed near the highs.

A long bull candle was formed on the daily chart, that has engulfed the reasonable positive candle of previous session. The formation of lower shadow indicate buy on dips opportunity in the market. This is positive indication.

Nifty is currently placed at the edge of crucial overhead resistance of around 16800-17000 levels (previous swing lows and 200 day EMA). Previously. this area has offered crucial support for the market and resulted in a strong upside bounce. Having witnessed a decisive downside breakout of this area in the last week, the market is now placed at the hurdle as per the concept of change in polarity.

Significance and past evidence of 16800-17000 levels signal tough task for the bulls to sustain above it in the short term. But, a sustainable upside above 17K mark is likely to change the short term bearish pattern of Nifty and that could open more upside in the near term.

Conclusion: The short term trend of Nifty remains positive with range bound action. Any decisive upside breakout of 17000 levels is likely to pull Nifty towards 17500 levels in a quick period of time. However, an inability of bulls to sustain above 16800 levels could trigger another round of downward correction to 16300 levels in the near term.

Source : Equity Bulls

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TechnicalWrap HDFCSecurities Nifty Sensex