Technical View - Dec 7, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The upside momentum continued in the market for the fifth consecutive sessions on Monday, and the Nifty closed the day with another handsome gains of around 97 points. After opening on a weak note, the market has shifted into a sustained upmove, which continued for the entire session. The mid-part intraday decline has been used as buy on dips opportunity and Nifty closed near the new high.

A long bull candle was formed on Monday on the daily timeframe chart and that registered yet another new all time high of 13366 levels. Though, Nifty placed near the swing highs, still there is no indication of any reversal or intraday profit booking signal as of now. This is positive indication and one may expect further upside in coming sessions.

The overall market breadth was continues to be positive on Monday and the broad market indices like mid cap 100 and small cap 100 have closed with fruitful gains of 1.14% and 1.26% respectively. This pattern display an inherent strength of the market at all time highs.

Nifty has surpassed the technical milestone of 13150 levels recently, which coincides with a formation of couple of negative patterns like bearish engulfing (25th Nov) and a doji (last weekly candle). Normally, such negations of bearish patterns could result in a sharp upside in the underlying. The anticipated upside is currently unfolding in the market and this is expected to continue for short term.

Conclusion: The short term trend of Nifty continues to be positive and the market is inching towards our upper trajectory of 13500-13600 levels gradually. Minor consolidation or intraday weakness are expected to be a buy on dips opportunity for the short term. Immediate support is now placed at 13250.

Source : Equity Bulls

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