Technical View - Dec 3, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a fine upside recovery from the lows, Nifty witnessed a choppy trend near the new all time high of 13216 on Thursday and closed the day on a minor positive note. Nifty opened on a positive note, registered a new high on the opening and slipped into minor weakness soon after the opening. It later shifted into a narrow intraday range for the whole session and closed the day within a range movement. The opening upside gap remains partially filled.

A reasonable negative candle was formed at the new highs and the market is now placed at the edge of the support of previous swing highs of 13140-13130 levels as per the concept of change in polarity. But, failed to show any convincing upmove from the support. This action could be a cause of concern at the highs.

The highs of recent negative candle patterns like bearish engulfing (25th Nov-daily timeframe) and doji pattern (weekly timeframe) of last week has been violated at 13145 on Thursday as per intraday timeframe, but the market was not able to sustain above the high of this pattern towards the end. This could mean a probability of further consolidation or higher level weakness in the coming sessions.

The negative divergence pattern continued on the daily chart (higher high in the Nifty and lower high in the RSI), which could signal tiredness of the market at the new highs and the profit booking could emerge from near all time highs.

Conclusion: The short term trend of Nifty remains positive and there is no indication of any reversal pattern forming at the new highs. The market was seen struggling at the new highs, which could open further consolidation or weakness from the highs. Immediate supports to be watched at 13000 levels. On the upper side 13250 could act as a key overhead resistance.

Source : Equity Bulls

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