Technical View - July 30, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
(Time Zone: UTC)
The Nifty continued to show lackluster type movement on Friday and closed the day lower by 15 points amidst intraday volatility. After opening on a positive note, Nifty witnessed an upside recovery from the lows in the early part of the session. Intraday range movement has emerged for the better part and weakness occurred from a day's high of 15862 in the afternoon to later part and the market closed lower.
A small negative candle was formed on the daily chart with upper shadow, which indicate a sell on rise action in the market. We observe a slower upside momentum in the last couple of sessions. After a massive intraday upside recovery from the lows of 28th July, the market not been able to register any strong upside momentum in the last two sessions. This market movement signal chances of another weakness from the highs, before showing any upside bounce again from the lows.
Though Nifty failed to sustain the gains today, the overall market breadth and broader market indices like mid and small caps have outperformed the benchmark index. Hence, the resilience of market breadth could suggest limited downside risk for the market ahead and chances of a strong buy on dips opportunity in the next week.
Nifty on the weekly chart formed a small negative candle with long lower shadow. The immediate support of 10w EMA has been regained at 15640 after breaking below it in intra-week. This is a good sign and indicate a chances of upside breakout from the lows.
Conclusion: The short term trend of Nifty is choppy. Present lack of strength to sustain the highs could open another round of small weakness in the early part next week, before showing a sustainable upside bounce from the lows. The crucial lower supports to be watched at 15600 levels.