Technical View - Dec 4, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a minor intraday weakness with range bound action on Thursday, Nifty witnessed a sustained upmove on Friday amidst a volatility and closed the day higher by 124 points. A long positive candle was formed, that closed near the new all time high of 13280 levels.

After opening on a positive note on Friday, the market has witnessed a decent upmove in the early part of the session. Intraday weakness of mid part has been absorbed by bulls to pull the market towards new highs in the later part of the session. The outcome of RBI's mid quarter policy meet seems to have turned out to be an uptrend continuation for the market.

The formation of long positive candle of Friday has surpassed the high of previous negative candle pattern of bearish engulfing (25th Nov) and closed higher. This is positive indication and the negation of this pattern could mean more upside for the market in the near term.

Nifty on the weekly chart formed a long bull candle and closed the week towards the new highs. The sharp weekly gains came in the week after the sluggish market movement of previous couple of weeks.

The confusing weekly pattern of doji has been negated on Friday, as Nifty closed above the high of last week at 13145. This could be considered as a strength of an upside momentum post upside breakout of long term resistance of uptrend line (connected from top to top-weekly timeframe). This is positive signal and more upside could be expected in coming weeks.

Conclusion: The short term trend of Nifty continues to be positive. The pickup of upside momentum in the later part and the negation of bearish pattern of daily (bearish engulfing) and weekly (doji) timeframe chart is expected to result in further strengthening of upmove in the near term. The upside levels to be watched for the next week is at 13500 levels and the immediate support is placed at 13150.

Source : Equity Bulls

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