Technical Wrap - March 8, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing steep weakness in the last three sessions, Nifty witnessed an excellent upside bounce from the lows on Tuesday and closed the day with modest gains of around 150 points. After opening on a weak note, the downside momentum continued in the market in early-mid part of the session. A sharp buying has emerged from the new swing low of 15671 levels and the market erased intraday loss completely and closed the day near the highs.

A long bull candle was formed on the daily chart, that has engulfed the previous sessions doji pattern completely. Technically, this action could be considered as a bullish engulfing pattern. Normally, such bullish engulfing patterns after a reasonable declines or at the supports are indicative of bullish reversal patterns.

The formation of couple of positive patterns in the last two sessions (doji of Monday and bullish engulfing of Tuesday) with long bull candle (within a high low range of 357 points) at the lows signal an upside bounce in the market. Hence, the swing low of 15671-Tuesday could now be considered as a short term bottom reversal for the market.

The negative sequence like lower tops and bottoms is intact as per daily timeframe chart and we observe a confirmation of new lower bottom on Tuesday. This could open a reasonable upside bounce in the market to form a new lower top of the sequence.

Conclusion: After a sharp weakness of the last few sessions, the Nifty has rebounded convincingly to show upside bounce for the short term. The near term negative trend of Nifty remains intact and the upper levels of 16250-16400 could offer strong resistance and one may expect sell on rise opportunity ahead.

Source : Equity Bulls

Keywords

TechnicalWrap HDFCSecurities Nifty Sensex