Technical View - July 22, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing sharp upmove in the last four sessions, Nifty shifted into a consolidation with volatile movement on Wednesday and closed the day with a slightly negative note. A small negative candle was formed at the highs with long lower shadow. Technically, this pattern indicates selling pressure near the high of 11250 and an emergence of buying from the immediate support of 11050 levels.

Nifty encountered key overhead resistance at 11250 levels (previous opening downside gap of 6th March). The said downgap is left with small margin. Since, the down gap of March 6th could be considered as an important gap area, as Nifty had witnessed sharp decline after the formation of this gap. Hence, the upper area of 11250 could be a key overhead resistance for the market ahead.

Though, Nifty showed higher levels weakness today (from the high of 11238), still there is no confirmation of any reversal pattern yet at the highs. The positive chart pattern like higher tops and bottoms is intact and any minor downward correction could be viewed as a part of higher bottom process. As per this pattern, the decline should halt around 11000-10950 levels in the next few sessions.

The near term uptrend status of Nifty remains intact. As long as Nifty holds above 10950-10900 levels, we are unlikely to see any major weakness in the market. A confirmation of reversal pattern at the highs is likely to indicate any important trend reversal in the market. Any short term upside bounce from here could find resistance around 11250-11300 levels.

Source : Equity Bulls

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