Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Nifty continued to show gradual upmove with range bound action on Wednesday and closed the day with modest gains of around 44 points. After opening with a positive note, the market slipped into weakness in the early part of the session. Sharp intraday buying has emerged from the day's low of 17711 levels and the upside momentum continued towards the mid to later part of the session.
A reasonable positive candle was formed on the daily chart with long lower shadow. Technically, this pattern indicates an uptrend continuation with range bound action. The doji pattern of Tuesday has been surpassed on the higher side marginally.
Nifty is gradually advancing towards the crucial overhead resistance of 17863 levels, which is not only a swing high of 17th April, but also the high of bearish engulfing pattern of daily and weekly timeframe charts. Hence, a sustainable move above this hurdle is likely to open sharp upside momentum for the Nifty ahead. Bank Nifty showed promising upmove from the days lows after the lackluster type movement on Tuesday. This is positive indication.
Conclusion: The short term trend of the market continues to be positive. The Nifty is now reaching towards the important resistance of 17863 levels in the short term. There is a possibility of minor consolidation movement at the highs before showing a decisive upside breakout for the near term. Immediate support is at 17700 levels.