Technical View - Sep 25, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing sharp fall on Thursday, Nifty witnessed hefty gains on Friday and closed the day higher by 244 points. A long bull candle was formed, that placed beside the long range bear candle of previous session. Technically, this indicate a strong comeback of bulls from the lows.

The larger upmove as per the positive sequence of higher tops and bottoms has been broken recently and Nifty shifted into a downward corrective action by the way of lower tops and bottoms in the last couple of weeks. Hence, last Thursday's low of 10790 could be considered as a new lower bottom of the sequence and Friday's upmove could be a considered as a part of new lower top. Hence, further upside can't be ruled out by early next week before showing another round of weakness from the highs.

Nifty has formed a long bear candle on the weekly chart with minor lower shadow. The formation of bearish engulfing pattern of early Sept and present formation of long bear candle could show the emergence of selling pressure from the highs. Hence, the near term downtrend status remains intact and any further upside bounce from here could be a sell on rise opportunity in the market.

Conclusion: Friday's sharp upside bounce could be a cheering factor for bulls to make a comeback, but the near term down trend status of the market remains intact. Any upside bounce up to 11350-11400 could be a sell on rise opportunity in the market and the expected decline from the highs could retest the lower 10800 levels in the near term. Immediate support is placed at 10900.

Source : Equity Bulls

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