Technical View - Oct 21, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing range bound action in the last couple of sessions, Nifty witnessed high volatility on Wednesday and closed the day higher by 40 points. A small negative candle was formed with minor upper and long lower shadow, which signal high volatility in the market.

Nifty opened Wednesday on a positive note, showed intraday range movement for the better part of the session. Sharp intraday weakness has triggered from the highs in the afternoon, but Nifty managed to show fine upside recovery from the lows and closed near the highs.

The upper area of 12K mark has acted as a strong resistance for the market again and resulted in a sharp intraday weakness from the highs. The high of the previous bearish engulfing pattern of 15th Oct was not able to breach higher on Wednesday, as Nifty made a swing high of 12018, before showing intraday weakness from the highs.

Today's market action could signal a high volatility and the key overhead resistance at 12025 levels, but the market has not been showing any sustainable weakness from the overhead resistance. The emergence of fine intraday upside recovery of Wednesday from the lows could bring some hopes for bulls to move up further.

Conclusion: The short term trend of Nifty is positive with high volatility. There is a possibility of retest of upper resistance levels (12025) again, before showing any intraday weakness from the highs. Broader range movement could be expected around 12050-11800 levels in the next 1-2 sessions.

Source : Equity Bulls

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