Technical View - June 14, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: UTC)
After the formation of doji type candle pattern on Friday, Nifty witnessed a high volatility with larger intraday movements of down and upmove on Monday and managed to close slightly higher by around 10 points. After opening on a downside gap, Nifty slipped into a sharp intraday weakness in the early part of the session. An excellent intraday buying has emerged from the day's low of 15606 in the early-mid part and the upside continued for the whole session. The opening downside gap has been filled completely.
A small positive candle was formed at the new highs with long lower shadow. Technically, this market action signal a formation of hanging man type candle pattern. Normally, formation of hanging man after a reasonable upmove or at the highs could act as as top reversal pattern, post confirmation. We now observe two back to back negative type candle patterns like doji and hanging man at the highs in the last two sessions. This could raise some concern for bulls to sustain the higher levels.
The upper area of 15800-15900 is now acting as a stiff resistance for the market at highs. At the lower levels, the daily 10 period EMA has been continuously offering support for the Nifty. Currently, the said moving average support is placed at 15670 levels.
Conclusion: The short term trend of Nifty continuous to be positive and there is no indication of any reversal pattern unfolding at the highs. At the same time, the market is finding stiff resistance around 15800-15900 levels and sharp intraday profit bookings are triggering from the highs. Till Nifty decisively crosses above 15900 levels, the high volatility likely to be expected in the next 1-2 sessions. Immediate support is placed at 15670.