Technical View - Aug 26, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing minor intraday weakness from the highs on Tuesday, Nifty continued to show upside momentum amidst a range movement on Wednesday and closed the day on a decent gains of 77 points.

A small positive candle was formed with minor lower shadow, which indicates a continuation of upside momentum in the market with range bound action. New swing high was formed at 11561 on Wednesday, but Nifty did not show any intraday profit booking from the highs.

The crucial overhead resistance of intermediate uptrend line (resistance as per the concept of change in polarity) at 11500 has been broken on the upside in this week, but there an evidence of lack of strength in the upside momentum at market highs recently.

This mentioned action could be a cause of worry for bulls to sustain the upside breakout. More often such lack of upside momentum during upside breakouts tend result in a false upside breakout of the underlying. On the way up, Nifty could encounter another upside resistance as per weekly timeframe chart at 11630-11650 levels.

The short term trend of Nifty continues to be positive. Next upside resistance to be watched at 11650 for the next few sessions. Immediate supports to be watched at 11450. A decisive/sustainable move above 11600-11650 could pull Nifty towards the next upside of 11900-12000 in the near term.

Source : Equity Bulls

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