Technical View - July 23, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: UTC)
After a fine upside bounce of Thursday, Nifty shifted into follow-through upmove amidst volatility on Friday and closed the day higher by 32 points. After opening on a positive note, the market showed knee jerk action on the downside in early part of the session. Sustainable upside recovery was seen for the better part, but the Nifty was not able to surpass the hurdle of 15900 levels in the afternoon to later part of the session and showed intraday consolidation towards the end.
A long legged doji type candle pattern was formed on the daily chart, which signal instability of the market near the new highs. This pattern indicate confusion state of mind among participants and one may expect consolidation movement or minor downward correction in the next session.
The crucial resistance area of previous opening downside gap of 19th July has been filled completely, but the upper gap area of 15900 has acted as a hurdle and has resulted in minor intraday weakness from the highs. A sustainable move above 15900 could only open further upside for the short term.
Nifty on the weekly chart formed a reasonable positive candle in a range move with long lower shadow. We observe a long lower shadows in the last two weekly candles. This signal buy on dips opportunity in the market.
Conclusion: The short term uptrend of Nifty remains intact. There is a possibility of further consolidation or minor downward correction from the highs in early next week. A sustainable move above 15900 could open next upside towards 16100 levels in the short term. Any weakness could find support at 15750 levels.