Technical Observation - March 19, 2020 - Nagaraj Shetti, Technical Analyst at HDFC Securities

The sharp weakness continued in Nifty with high volatility on Thursday and the market ended with a loss of 2.4%. We observe a formation of small bull candle with upper and lower shadow, which indicates a formation of high wave type candle pattern. Normally, such high wave formation after a reasonable decline indicates cautious approach for bears at the lows.

Nifty registered new swing low at 7834 on Thursday, which is near a support of higher bottom of Dec 2016. Hence this pattern could be a cheering factor for bulls to make a comeback. But the sustainability on upside bounce could be a difficult task.

The short term trend of Nifty continues to be negative. Having showed minor buying from the lows, the chance of sustainable upside bounce could be less. Any attempt of up move towards 8500-8550 could be a sell on rise opportunity.

Source : Equity Bulls

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