Technical View - Oct 9, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After the formation of doji type candle pattern on Thursday, Nifty continued its upside momentum for the seventh consecutive sessions on Friday and registered yet another decent gains of 79 points. A reasonable positive candle was formed with lower shadow, technically, this pattern indicate an uptrend continuation pattern. The overall market breadth has improved slightly, but the broad market indices like mid and small cap segments have continued with minor decline on Friday.

Nifty is now placed at the strong position and more upside is likely in the near term. The recent upside breakout of important trend line resistance (11600) as per weekly timeframe (according to change in polarity), the negation of bearish engulfing pattern of daily and weekly timeframe chart (by closing above 11794) and the negation of doji pattern of Thursday-as per daily timeframe chart.

All these positive evidences are all pointing towards a strong placement for the market to go up further. Technically, such negations of bearish patterns more often results in a continuation of sharp up trended moves in the underlying.

Nifty on the weekly chart formed a long bull candle and the whole chart pattern now indicate a larger positive sequence of higher tops and bottoms. Hence, more upside could be in store in the near term to form a yet another higher top reversal at the new swing highs.

Conclusion: The underlying trend of Nifty continues to be positive. The overall chart pattern signal more upside for the market in the near term. The upside targets to be watched for the coming week at 12250. Immediate support is placed at 11800.

Source : Equity Bulls

Keywords