Technical View - Aug 18, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing upside bounce from the lows on Monday, Nifty witnessed an excellent upmove on Tuesday and closed the day with decent gains of 138 points. A long bull candle was formed and Nifty formed a new swing high of 11401 levels on Tuesday. This pattern indicates a strong comeback of bulls after one sessions of declines.

Nifty is making an attempt of staging upside breakout of the immediate resistance of previous swing highs around 11350-11375 levels (placed just above it). The formation of bearish engulfing pattern of 14th August has been nullified completely. This is positive signal and one may expect further upside in the short term. The downside breakout attempt of sideways range of 14th Aug has proved to be a false downside breakout.

Nifty is nearing an intermediate resistance as per long term charts around 11500 levels (trend line resistance as per change in polarity, as per weekly chart) and this area is expected to be broken on the upside, before showing any downward correction from the highs.

The short term trend of Nifty continues to be positive. Nifty could encounter another overhead resistance around 11500-11600 levels in the next few sessions and there is a possibility of another round of minor profit booking from the highs by the week end or by next week. Immediate support is now shifted to 11350-11300.

Source : Equity Bulls

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