Technical View - Nov 5, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a sharp upside bounce on Wednesday, Nifty witnessed an excellent follow-through upmove on Thursday and closed the day higher by 211 points. A reasonable positive candle was formed with gap up opening and the opening upside gap remains unfilled.

After opening on an upside gap of 154 points on Thursday, Nifty shifted into a narrow high low range for the whole session and made an attempt to inch up further towards the end to close near the highs. Technically, this pattern could mean an uptrend continuation and the unfilled opening upside gap could be considered as a bullish breakaway gap. This is positive indication and more upside could be in store in the short term.

We observe a sustainable upside breakout of the hurdle of previous swing highs around 11950-12025 levels, which was coincided with a down sloping minor trend line. This also indicates an upside breakout of the recent broader range movement of the market.

Positive sequential movement like higher tops and bottoms continued on the daily chart and some more upside from here could open a chances of a new higher top formation at the highs. The next important resistances are placed at 12250 and next 12430 levels, which could offer key resistance for the market on the higher side.

Conclusion: The short term trend of Nifty continues to be positive and one may expect further upside in the market for the short term. Having showed an upside breakout of the key resistance, the Nifty could encounter the next crucial resistances of around 12250/12430 levels in the near term. Immediate support is placed at 12000-12050 levels.

Source : Equity Bulls

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