Technical Wrap - Sep 20, 2023 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a narrow range movement in the last few sessions, Nifty witnessed sharp sell off on Wednesday and closed the day lower by 231 points. After opening with a downside gap of 153 points Nifty slipped into further weakness in the mid to later part of the session. Intraday upside recoveries in between have been sold into and the Nifty closed near the lows. The opening upside gap remains unfilled.

A long bear candle was formed on the daily chart with upper shadow. This candle pattern indicates formation of short term top reversal pattern in Nifty at the swing high of 20222 levels. The unfilled opening downside gap of Wednesday hints at a possibility of bearish break away gap.

Normally, bearish breakaway gaps are formed at the crucial top reversals. Hence, one may expect further weakness in the short term. Having moved below the immediate support of 10 day EMA at 19940 levels now, the market is expected to slide down to the lower 20day EMA around 19780 levels in the coming sessions.

The underlying trend of Nifty is weak and the overall chart pattern signal a formation of short term top reversal pattern at the recent new highs. The Nifty is expected to test the crucial lower supports of around 19750-19600 levels in the near term. Any attempt of upside bounce is expected to find strong resistance around 20050-20100 levels.

Source : Equity Bulls

Keywords

TechnicalWrap HDFCSecurities Nifty Sensex