Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing weakness on Monday, Nifty witnessed sharp U turn on Tuesday and closed the day with hefty gains of around 386 points. After opening with an upside gap of 260 points, the market continued its upward journey amidst range movement for better part of the session. Upside gained momentum towards the end and Nifty closed near the highs. The opening upside gap remains unfilled.
A long bull candle was formed on the daily chart with gap up opening (body gap, not a western gap). This indicates an upside breakout of the larger consolidation movement around 16800-17200 levels. The immediate hurdle of previous opening gap of 26th Sept has been filled on Tuesday at 17290 levels. This is positive indication and a sustainable move above 17300 levels could be a sharper one.
Nifty has now respected the important lower support of 16800 levels, as per the concept of change in polarity. As happened in the past, the present upside bounce from this support (16800) could hint at a possibility of sustainable upmove in the near term.
Conclusion:The short term trend of Nifty has turned up sharply after a broader range movement of the last few sessions. A decisive move above 17300 levels is likely to pull Nifty towards the next crucial resistances of around 17600 and next 18000 levels in the near term. Immediate support is placed at 17150 levels.