Technical Observation - April 24, 2020 - Nagaraj Shetti - Technical Analyst, HDFC securities

After showing fine upside bounce on Wednesday and Thursday, Nifty slipped into weakness on Friday amidst a weak global cues and closed the day lower by 1.7%. A small body of negative candle was formed today with long upper shadow. Technically, this could signal weak bias and sell on intraday rise action. Friday's opening downside gap has been filled partially (left with small margin).

Today's weakness could signal a possible lower high formation (at the swing high of 9345). But this needs to be confirmed with follow-through weakness in coming sessions.

A reasonable negative candle was formed in Nifty this week, as per weekly timeframe chart with lower shadow. We observe similar candle pattern of bull bear in the last two weeks. The last two week's candle is not pointing towards any strong follow through upmove.

The short term upside strength of Nifty seems to be lacking, further weakness below 9000-8950 levels could open sharp downward correction in the market by next week. The weakness below 9000 could be considered as a downside breakout of rising wedge pattern. If such downside breakout of wedge occurs, then Nifty could test lower 8500 levels in the next 1-2 weeks. Immediate resistance is placed at 9350-9400.

Source : Equity Bulls

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