Technical View - July 29, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing upside breakout of sideways range at 11240 levels on Tuesday, Nifty slipped into weakness today and closed the day lower by 97 points. A reasonable negative candle was formed with a new swing high formation at 11341.40. Technically, this pattern signal negation of upside breakout attempt of previous session.

Though, Nifty failed to continue with follow through upmove on Tuesday, the underlying uptrend status remains intact. As long as the lower support of 11150-11100 levels holds, there is a possibility of further upside in the market for the short term. At the same time, upper levels of 11350-11400 could act as a key overhead resistance in the near term.

Nifty on the daily chart has been showing strength to sustain the highs and has witnessed minimum downward correction in the last one month. One session declines in the last 3-4 occasions have reversed its trend on the upside in the subsequent sessions. Hence, there is a possibility of upside bounce from the lows in the coming sessions.

Daily 14 period RSI is placed above 60 levels and is gradually turning up signaling strength in the upside momentum. As per its formulation, one may expect upmove to resume further from here or from slightly lows in the next few sessions.

The short term trend of Nifty is slightly negative. But the overall uptrend status of the market remains up and still there is no formation of any reversal pattern at the highs, as per daily chart. There is a possibility of upside bounce (from here or from the lows) and retest of the overhead resistance of 11350 in the next few sessions. On the downside the area of 11100-11060 is likely to offer strong support for the market ahead.

Source : Equity Bulls

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