Market Commentary

Technical Wrap - April 25, 2022 - HDFC Securities

Posted On : 2022-04-25 19:12:36( TIMEZONE : IST )

Technical Wrap - April 25, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Nifty continued its decline for the second consecutive sessions on Monday and closed the day lower by 218 points amidst volatility. After opening with a downside gap of 162 points, the market continued its weakness soon after the opening. The market later shifted into a narrow range movement with weak bias in the mid part and minor buying from the lows has emerged towards the end. The opening downside gap remains unfilled.

A small negative candle was formed on the daily chart with minor upper and lower shadow. Technically, this pattern signal a formation of high wave type candle pattern, which indicate high volatility in the market. Normally such formations after a reasonable decline or near the crucial supports more often act as a reversal pattern.

Nifty is currently placed at the support of previous swing low of 19th April and 200 day EMA around 16850 levels. The lower end of crucial doji pattern of weekly chart of last week is placed at 16850 levels and the market has witnessed a reasonable upside bounce from near this area in the recent past. Hence, there is a possibility of buying emerging from near 16800 levels.

Conclusion: The short term trend of Nifty continues to be negative. The placement of important supports around 16800 levels and a formation of weekly and daily pattern indicate a probability of an upside bounce from the lows in the next 1-2 sessions. Confirmation of reversal pattern at the lows could signal a quantum of upside bounce in the market.

Source : Equity Bulls


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