Technical Wrap - March 20, 2023 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a sustainable upside bounce on Friday, Nifty rebounded sharply on the downside on Monday and closed the day lower by 111 points. After opening with a negative note, the market continued to show weakness till the mid part of the session. Sharp intraday upside recovery has emerged in the mid part from the days low of 16828 levels and Nifty finally closed the day of the lows.

A small negative candle was formed on the daily chart with long lower shadow. Technically, this pattern indicates a formation of bullish hammer type candle pattern. Normally, such hammer formation after a reasonable downward correction or at the swing lows more often results in a trend reversal on the upside, post confirmation.

After the formation of couple of doji patterns on Thursday and Friday, Nifty forming a hammer type candle pattern indicates that the market is forming base around 16800 levels and one may expect upside bounce in the short term.

Conclusion: The short term trend of Nifty continues to be negative. The formation of long lower shadows of last three sessions and a formation of doji and hammer type candle pattern at the lows of 16800 levels in the last few sessions hints at a possibility of lower bottom reversal for the Nifty in the short term. A sustainable upside above 17150 levels could confirm short term bottom pattern.

Source : Equity Bulls

Keywords

TechnicalWrap HDFCSecurities Sensex Nifty