Technical View - Oct 22, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
2021-10-22 22:44:44 (Time Zone: IST)
The downside momentum continued in the market for the fourth consecutive sessions on Friday and Nifty closed the day lower by 63 points. After opening with an upside gap of 52 points, Nifty made an attempt to move up in the early part of the session. Intraday weakness got triggered from the day's high of and the market shifted into weakness for better part of the session. Minor upside recovery has emerged towards the end.
A small negative candle was formed on the daily chart with minor upper and lower shadow. Technically this pattern indicate weakness in the market with high volatility. We observe overlapping negative candles in the last 2-3 sessions, which signifies bulls attempt of upside recoveries in between. This pattern could be considered as positive for the bulls to make a comeback.
Nifty on the intraday timeframe like 60 mins indicate a formation of double bottom around 18050-18070 levels and false downside breakout of this area. As long as this double bottom area holds in the next week, there is a higher chances of sustainable upside bounce emerging in the Nifty for short term.
The crucial lower support of 10day EMA was violated marginally on the downside at 18140 levels and the next support of 20day EMA is intact at 17970. Hence, these area is going to be an important base for the market for any upside bounce from here.
Conclusion: The short term trend of Nifty continues to be negative. The overall chart pattern of intraday and daily timeframe signal chances of bulls coming back from the lows. Confirmation of bullish reversal pattern in the subsequent session could open up upside bounce in the market. The important support is placed for next week around 18150-17950 levels.