Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing upmove with high volatility on Thursday, Nifty witnessed a sustainable upmove with range bound action on Friday and closed the day higher by 142 points. After opening with a positive note, the Nifty shifted into a narrow range movement, which continued for the whole session. Minor selling pressure amid range movement was noticed around 15750 levels and Nifty closed near the highs.
A small positive candle was formed on the daily chart, which indicate a follow-through upmove in the market. Nifty is currently placed at the crucial overhead resistance of 15700-15800 band as per the concept of change in polarity.
The present hurdle of 15800 is expected to be a strong overhead resistance, as this area has resulted in a formation of long bear candle during its downside breakout in the recent past. The market needs to gather strong upside momentum to witness a decisive upside breakout of the hurdle, which is missing as of now. Nifty on the weekly chart bounced back sharply this week after a steep decline in the last two weeks. The market is also placed at the weekly resistance of around 15800 levels.
Conclusion: The short term trend of Nifty continues to be positive. Having placed at the significant overhead resistance at 15800 levels, there is a possibility of one more leg of small downward correction from the highs of around 15800-15900 levels by next week, before showing any decisive upside breakout.