Technical View - May 11, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: UTC)
After showing a sustainable upmove in the last four sessions, Nifty slipped into weakness on Tuesday amidst a weak global cues and closed the day lower by 91 points. Nifty opened on a downside gap of 153 points and started with fine intraday upside recovery in the initial half of the session. Intraday weakness got triggered in the afternoon and the market finally closed the day on a minor upside recovery note. The opening downside gap remains partially filled.
A reasonable positive candle was formed at the lows with minor upper shadow. Technically, this pattern indicate an attempt of comeback of bulls after early part weakness. This signal that the market is not willing to give up the upper range of 14900 levels. Though, Nifty declined on Tuesday, the overall market breadth was positive and the broad market indices like midcap and small cap of NSE have closed higher by 0.79% and 0.82% respectively. This is positive indication.
The upper range of 14900-15000 levels have finally proved difficult task for the market to breakout on the higher side and the current weakness from the highs could be considered as another failed upside breakout attempt of the broader high low range. There is a possibility of this weakness getting over in the next 1-2 sessions and one may expect a formation of higher bottom around 14700-14750 levels. This market action signal increasing strength of upside momentum and that could eventually result in Nifty retesting the hurdle and the upper range around 15000-15100 levels.
Conclusion: The decline of Tuesday seems to have dampen the effort of bulls to stage upside breakout of the hurdle at 15 K mark. The overall chart pattern indicate limited decline from here and a formation of higher bottom formation and subsequent upside bounce in the market from the lows. Immediate support is placed at 14750 and on the higher side 14970 could act as immediate resistance.