Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing sustainable upmove on Monday, Nifty shifted into a range bound action on Tuesday and closed the day with modest gains of 25 points. After opening with a positive note, the Nifty slipped into minor weakness soon after the opening. It later shifted into a sustainable upside recovery in the mid part, but was not able to close near the highs.
A small positive candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicates a formation of doji type candle pattern (not a classical one). Normally, such doji formations after a reasonable upside alerts for trend reversal. Hence, present doji formation after a small rise could signal be cautious indication for the market at the highs.
Though, Nifty moved up decently in the last two sessions, the chart pattern still shows dicey for the market ahead. Unless the swing highs of 17865 is taken out decisively on the upside, the sharp upside breakout can't be expected and the market could even shift into consolidation or weakness.
Bank Nifty has started to show minor selling pressure at the hurdle of 43000 levels. Though, daily candle pattern formation is not showing any reversal, but the overall pattern suggests some more consolidation in the short term.
Conclusion: The short term trend of Nifty is positive with range bound movement. Any failure to sustain above the crucial hurdle of 17865 levels could open further consolidation or weakness in the short term. Immediate support is around 17650-17600 levels.