Technical View - Aug 24, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing upmove with range bound action on Friday, Nifty continued to show upside momentum on Monday and closed the day on a decent gains of 94 points. A long positive candle was formed with gap up opening (body gap, not a western gap) and the upside gap remains unfilled. New swing high has been formed today at 11497.

Though, Nifty continued with positive chart pattern like higher highs and higher lows recently, the the high low range of this pattern is getting narrowed at the swing highs. Normally, such narrowing of the range at the highs or near the crucial resistance more often results in an important trend reversals.

Nifty on the weekly chart is making an attempt to move above the significant intermediate overhead resistance around 11450-11500 levels (resistance as per the concept of change in polarity). Any lack of strength in the upside momentum near the hurdle is likely to drag the market into a sharp profit booking from the highs. Hence, one needs to be cautious about false upside breakout of 11500.

Daily and weekly RSI is placed at the upper 60 levels and there is no indication of any sharp turn up from that 60 levels. This pattern reflects ongoing range movement in the market on the way up.

The short term trend of Nifty continues to be positive. A sustainable move above 11550 levels could have some more upside in the near term, but there is a higher probability of one more profit booking from the highs of around 11500-11600 levels in the short term. Immediate support is placed at 11370.

Source : Equity Bulls

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