Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing a downward correction in the last three sessions, Nifty witnessed a decent upside bounce on Tuesday amidst a range movement and closed the day higher by 84 points. Nifty opened with positive note and moved up further in the early part of the session. It later shifted into a narrow range movement in the mid part and displayed further sustainable upside towards the end to close near the highs.
A reasonable positive candle was formed on the daily chart, post weakness of few sessions. Technically, this pattern indicates an upside bounce in the market. The Nifty has moved up on Tuesday from near the important cluster support of around 18100 levels (20 day EMA, Opening upside gap of 11th Nov and pervious swing highs as per the concept of change in polarity). This is positive indication.
The positive chart pattern like higher tops and bottoms continued on the daily chart and the recent swing low of 18133 could now be considered as a new higher bottom. We need confirmation of further upside to call this as a higher bottom reversal pattern.
Conclusion: The market seems to have halted its short term downward correction and started with decent upside bounce from the lows. Further sustainable upmove from here is expected to pull Nifty towards the recent swing highs of 18450 levels and that is likely to open doors for new highs around 18600+ levels. Immediate support is placed at 18100.