Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing weakness in the last four sessions, the Nifty closed the day on a flat note on Monday amidst high volatility. After opening with a flat note, the market has witnessed intraday see-saw type moves in the early and mid part of the sessions. It failed to sustain the highs and closed near the open.
A small body candle was formed on the daily chart with upper and lower shadow. The opening and close were almost identical for the day. The present chart pattern indicates a formation of doji type candle pattern at the swing lows. Normally, such doji formations after a reasonable decline alerts for a bounce back from the lows. A sustainable positive close in the subsequent session is likely to confirm upside bounce for the market.
Nifty is currently placed near the support of 20 week EMA around 19580 levels. The said moving average has offered strong supports for the Nifty since past 3-4 months. Hence, there is a possibility of an upside bounce in the near term. At the highs, the market could find strong resistance around 19850 levels. Immediate supports to be watched around 19600-19550 levels.