Technical Observation - May 8, 2020 - Nagaraj Shetti - Technical Analyst, HDFC securities

After showing narrow range movement in the last few sessions, Nifty made an attempt to move up in today's session, but was not able to close at the higher end of the day. A reasonable negative candle was formed today after opening higher, which indicates a formation of counter attack type candle pattern. Today's pattern indicates sell on rise action in the market. This is not a good sign for bulls to make a comeback.

The bearish island reversal pattern of 4th May is still intact. Both the up and down gaps are open after four sessions of its formation. The downside pattern target is at 8900 levels.

A long negative candle was formed in Nifty on the weekly chart, after a sharp rise of last week. This pattern could signal lower top reversal for the Nifty around 9900 levels. Hence follow-through weakness in the next week could trigger further declines in the market ahead.

The short term trend of Nifty is range bound with slight positive bias. The overall chart pattern indicates possibility of weakness in the next week. Any attempt of upside bounce is likely to halt around 9400 levels. The downside levels to be watched for the next week is 8900 or lower. Immediate support is placed at 9150.

Source : Equity Bulls

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