Technical View - Nov 2, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing lower levels recovery on Friday, Nifty witnessed similar type action on Monday and closed the day higher by 26 points. After opening on a positive note, Nifty shifted into a roller coaster ride for the day and showed upside bounce during later part of the session. Minor intraday profit booking has occurred towards the end.

Minor negative candle was formed with long lower shadow, which indicate an emergence of buying from the lower levels. We observe back to back formation of two identical candle pattern in the last two sessions. These patterns have formed just below the key overhead resistance of 11750 levels. This action could signal that the bulls are preparing to surpass the hurdle shortly.

We observe a formation of minor degree of lower highs on the daily chart and any upside bounce from here could open another lower high around 11800-11850 levels. This upside could emerge only after the sustainable movement above the 11750 levels (resistance as per the concept of change in polarity).

Nifty on the weekly chart sustained above the long term trend line support around 11600 levels, after the intraday violation. Having placed on this significant trend line support as per the concept of change polarity, one can't rule out a possibility of an upside bounce in the market.

Conclusion: The short term trend of Nifty is range bound with positive bias. The daily/Intraday chart pattern signal a possibility of an upside breakout attempt of 11750 levels in the next 1-2 sessions. On the upper side 11800-11850 is going to be the next resistance. Immediate support is placed at 11550.

Source : Equity Bulls

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