Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing sharp weakness on Monday, Nifty continued with follow-through decline with range bound action on Tuesday and closed the day lower by 46 points. After opening with a positive note, Nifty was not able to sustain the opening gains and slipped into gradual weakness amidst a choppy movement. Intraday volatility was seen in the mid part and Nifty showed upside recovery from the lows towards the end.
A long bear candle was formed on the daily chart with minor lower shadow. Technically we observe overlapping negative candles at the hurdle and the market is sustaining above the immediate support of 17600 levels. Formation of such overlapping candles and lower shadows indicate intent of bulls to make a comeback in the market.
Nifty is currently sustaining at the support of previous upside broken trend line hurdle around 17600 levels, as per the concept of change in polarity. This support is visible in Nifty as per daily and weekly timeframe charts.
Bank Nifty on the daily chart formed a small negative candle with upper and lower shadow on Tuesday. The overall chart pattern of BN indicates a consolidation at the highs. However, sharp reversal/weakness is missing in both the indices at the highs.
Conclusion: The short term trend of Nifty remains choppy and the medium uptrend status is intact. There is a possibility of some more consolidation for the next 1 or 2 sessions before resuming its upside momentum again from the lows. Immediate support is around 17600-17500 levels.