Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Upside momentum with choppy action continued in the market for the seventh consecutive sessions on Tuesday and Nifty closed the day higher by 94 points amidst volatility. After opening with an upside gap of 80 points, Nifty continued to move up in the early to mid part of the session. Intraday weakness of mid part has turned out to be a buy on dips opportunity and Nifty closed near the highs.
A small body of positive candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicates a formation of high wave type candle pattern. Normally, such high wave formation after a reasonable upside indicates high volatility in the market and some time they act as a top reversal pattern post confirmation.
The Nifty has gradually gaining upside momentum and surpassing one hurdle after another. After the sustainable upmove through the resistance of previous opening down gap of 10th March at 17600 levels, the Nifty is in an attempt of moving above the another hurdle at 17800 levels, which is previous lower top of 6th March.
Another crucial resistance of down sloping trend line has also been taken out on the upside on Tuesday at 17680 levels. On the other side, the Bank Nifty has outperformed the benchmark on Tuesday. The negative pattern that formed on Monday has been nullified in the subsequent session. The next upside levels to be watched for BN at 41900 levels.
Conclusion: The underlying trend of Nifty continues to be positive. Though, Nifty advancing gradually on the upside, its consistent upmove above the hurdles signaling more upside ahead. A decisive movement above 17800 levels is expected to open the next upside target of 18200 levels in the near term. Immediate support is at 17650 levels.