Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The upside momentum continued in the market for the seventh consecutive sessions on Wednesday and Nifty registered yet another decent gains of 119 points. After opening with a positive note, the market extended its gains in the early to mid part of the session. Minor intraday declines have been bought into and the market finally showed minor consolidation at the swing high of 17965 towards the end.
A small positive candle was formed on the daily chart with minor upper and lower shadow. Technically, this pattern indicates a continuation of upside momentum in the market without any reasonable downward correction from the highs.
Nifty has moved above the significant trend line resistance at 17900 levels on Wednesday (multi-month down trend line connected from important lower tops), which is signaling an upside breakout of the hurdle. But, the formation of reasonable size bull candle during breakout signal absence of strong upside momentum at the highs. Technically, formation of long bull candle that breaking above such resistances are considered as a decisive upside breakouts of the hurdles.
Conclusion: The upward journey continued in the market and Nifty managed to move above the hurdle of 17900 levels. However, any lack of strength around 17900-18000 levels in the next 1-2 sessions could pull Nifty below the resistance area in the short term. On the other side, a decisive move above 18K mark is likely to pull Nifty towards the next upside target of 18600 levels in the near term. Immediate support is placed at 17760 levels.