Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The minor weakness with range bound action continued in Nifty on Tuesday and the market closed the day lower by 58 points amidst volatility. After opening with a negative note, the market shifted into a narrow range movement which continued for the whole session. The opening downside gap remains partially filled.
A small positive candle was formed on the daily chart at the lows. After the formation of bullish hammer type candle pattern on Monday, Nifty shifted into a consolidation movement at the lows on Tuesday and closed above the low of hammer at 18591 levels. This is positive indication and it raises hopes for an upside bounce soon in the market.
Nifty sustained above the support of 10 day EMA and also a support of ascending trend line as per the concept of change in polarity. Though, the market declined in the last three sessions, the sharp weakness or any significant negative reversal pattern is absent. This is positive indication.
Conclusion: The Nifty remains in a consolidation movement with gradual weakness. The market is expected to witness upside bounce from near the support of 18550 levels in the next 1-2 sessions.