Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing a sharp upmove on Thursday, Nifty witnessed steep U turn on the downside on Friday and closed the day lower by 186 points. After opening with a negative note, the market shifted into a downside momentum which continued for the whole session. An attempt of intraday upside recovery in between has been failed and the Nifty finally closed near the lows.
A small negative candle was formed on the daily chart with long upper shadow. This market action indicates rejection of bulls at the higher levels. However, the chart pattern also signal bull trap for the market participants, as Nifty failed to sustain above the strong overhead resistance of 18200 levels on Friday, after sustaining above it on Thursday.
The positive chart pattern like higher tops and bottoms is still intact and present weakness could be in line with the formation of new higher bottom. Hence, further weakness from here could signal higher bottom reversal around the next important support of 17800 levels. Nifty on the weekly chart formed a small negative candle with long upper shadow. This chart pattern hints at a possibility of more weakness in the coming sessions.