Technical View - Nov 26, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a sharp weakness from the new highs of 13145 on Wednesday, Nifty witnessed a smart comeback on Thursday and closed the day higher by 128 points. After opening on a positive note, Nifty slipped into a minor weakness amidst a range movement in the early to mid part of the session. A sharp upside bounce has occurred from the lows in the mid to later part of the session and the market moved up and closed near the upper end of the day's range.

The overall market breadth has turned up on Thursday, after a decline of Wednesday and broad market indices like midcap 100 and small cap 100 have closed higher by 0.86% and 0.80% respectively.

A reasonable positive candle was formed with minor lower shadow. Technically, this pattern indicates comeback of bulls from the lows, after one session of weakness. The formation of bearish engulfing pattern of Wednesday has placed again at the verge of negation.

A sustainable move above 13150 levels could negate this bearish pattern completely. Previously, for the few occasions the market has failed to show any follow-through weakness post such bearish engulfing pattern. This is positive indication and signals a strength of upside momentum in the market.

Conclusion: The formation of reversal pattern of Wednesday (bearish engulfing) seems to have not confirmed, as Nifty bounced back sharply in the subsequent session. This market action could open Nifty to move towards the recent all time high of 13145 levels in the near term. Important support is placed at 12800 levels.

Source : Equity Bulls

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