Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Nifty continued to show upside recovery from intraday lows on Wednesday and closed the day with modest gains of 30 points amidst range movement. After opening with a downside gap of 65 points (body gap, not a western gap), Nifty slipped into further weakness soon after the opening. However, the intraday buying has emerged quickly from the day's low of 19317 levels in the early part and the upmove continued in the mid to later part of the session with range bound action. The opening downside gap has been filled completely.
A small positive candle was formed on the daily chart with minor upper and lower shadow. Technically, this pattern indicates a side by side bull candle type pattern, but the placement of the pattern is not ideal. Hence, one may expect minor upside bounce from here, but a sustainability of this bounce could be a big question on the market.
The negative chart pattern like lower tops and bottoms is intact. Having formed a new lower bottom at 19257 on Monday, the odds of Nifty forming another lower top could be high in the short term. Currently, the strong cluster resistance is placed around 19550-19600 levels (down sloping trend line, daily 10/20 day EMA) and one may possibly expect weakness from the highs for this week. Immediate support is placed around 19250-19300 levels.