Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The choppy movement continued in the market on Wednesday and Nifty closed the day lower 41 points amidst a range movement. After opening with a negative note, the market slipped into weakness soon after the opening. It later shifted into a narrow range movement, which lasted till the end.
A small negative candle was formed on the daily chart with minor upper and lower shadow. Technically, this action reflects a small range movement in the market. The high low range of the market is getting narrower in the last three sessions and the Nifty placed firmly at the crucial support of previous upside broken trend line resistance at 17600 levels.
The sharp selling participation is missing this time after the formation of new higher top at 18863 levels on 17th March. This is compared to previous formations of lower tops and subsequent sharp declines of the last few months. This is positive indication. Bank Nifty continues to show consolidation movement for the third consecutive sessions on Wednesday. Immediate support is at 41800 levels.
Conclusion: The underlying short term trend of Nifty continues to be choppy and this market action is expected to continue for the next session. The market is likely to find support around 17600-17500 levels before showing upside bounce from the lows.