Technical View - Nov 23, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Range bound movement with positive bias continued in the market on Monday and Nifty closed the day with modest gains of 67 points. After opening on a positive note, the Nifty slipped into intraday weakness and filled the opening upside gap completely in the early part of the session. It later shifted into a gradual upside bounce and registered a new all time high of 12968 in the afternoon to later part of the session and closed near the highs.

A small body of negative candle was formed with lower shadow, technically, this pattern could mean a buy on intraday dips action in the market. The Nifty remain in a narrow range of 12970-12730 levels over the last few sessions. As long as it stays in a range, that could create a cushion for a sharp upside breakout of the hurdle of 13000 levels.

We observe a positive sequence of higher highs and lows on the daily timeframe chart and the daily 14 period RSI is hovering around 70 levels. Though, Nifty is registering new all time highs day by day, still there is no indication of any significant reversal pattern at the highs and the buying is consistently emerging from the lows, during small corrections.

Nifty on the weekly chart sustained above the key overhead resistance of 12800 levels for the second week (up trend line, connected top to top-weekly/monthly timeframe). This is positive indication and one may expect further upside in the near term.

Conclusion: The short term trend of Nifty is range bound with positive bias. A sustainable move above 13000 levels is expected to bring sharp upside momentum back into action, which could later pull Nifty towards 13500-13600 levels in the near term. Inability to show upside breakout of 13K mark could result in further consolidation or minor weakness from the highs. Immediate support is placed at 12800-12750.

Source : Equity Bulls

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