Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The weakness with range bound action continued in the market on Friday and Nifty closed the day on a flat note. After opening on a positive note, the market failed to sustain the opening gains and later slipped into an intraday weakness with range bound action. The weakness got intensified in the afternoon, but the Nifty was able to show a sustainable intraday upside recovery in the later part and closed the day off the lows.
A small negative candle was formed on the daily chart with upper and lower shadow. Technically, this market action signal a formation of high wave type candle pattern. But, having moved with in range bound action over the last few sessions, the predictive value of this high wave pattern could be less.
Nifty is sustaining above the support of previous upside broken trend line at 17600 levels in the last few sessions, but was not able to show any sustainable upside bounce from the said support. This is not a good sign and this indicates possible downside breakout of the support.
Nifty on the weekly chart formed a long bear candle, that has engulfed the previous weeks bull candle marginally. This is signaling a formation of bearish engulfing pattern, but not a classical one. The Bank Nifty continued to show range bound movement with weak bias for this week.
The short term trend of Nifty remains weak and there is a possibility of some more weakness in the coming week. A decisive break below 17600-17550 levels could open sharp decline for the market. Immediate resistance is at 17700 levels.