Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing a sustainable upside bounce from the lows on Wednesday, Nifty witnessed sharp reversal on the downside on Friday and closed the day lower by 164 points. After opening with a slightly positive note, the market unable to sustain the opening gains for long and started with weakness in the early part of the session. Intraday upside recovery of mid part has turned out to be a sell on rise opportunity for the day.
A long bear candle was formed on the daily chart, which indicates a formation of bearish engulfing type candle pattern. Formation of such pattern after a reasonable upside could be considered as a bearish reversal pattern. Hence, one may expect follow through weakness in the coming session.
Nifty seems to have formed a new lower top at the important resistance of 17800 levels (opening downside gap of 22nd Feb and weekly 10 and 20 period EMA) and one may expect further weakness down to 17400 levels in the short term. Any upside bounce from here could encounter resistance around 17680-17700 levels.