Technical View - Dec 8, 2020 - Nagaraj Shetti, Technical Analyst, HDFC Securities

After showing a sharp upmove in the last couple of sessions, Nifty shifted into a consolidation at the new all time high of 13435 on Tuesday and closed the day on a minor gains of 37 points. After opening on a positive note, Nifty shifted into a sustained intraday upmove for the better part of the session. Intraday weakness got triggered from the highs in the early to mid part of the session, but the market has witnessed smart upside recovery for the remaining part and closed near the highs.

A small body candle was formed with long lower shadow. Technically, this pattern indicate a formation of doji type candle pattern at the new all time high of 13435. Normally, a formation of doji pattern after a reasonable highs could be considered as a warning signal for the reversal.

Presently, Nifty is in a sharp up trended move and few negative candle patterns at the highs have been negated decisively (doji of weekly and bearish engulfing of daily timeframe) and the market continued its upside momentum. Hence, there is no confirmation of any reversal as of now and one may expect further upside in the short term.

Nifty on the weekly chart formed a long bull candle in the last week, post consolidation of previous two weeks. Presently, another long bull candle is at the verge of forming (another three sessions to come), which could display a strength of bulls at higher levels.

Conclusion: The short term trend of Nifty is positive with range bound action. There is a possibility of further upside in the next 1-2 sessions. As we scale higher, there is a higher chances of volatility emerging in the market at new highs. The expected upside levels to be watched at 13500-13600 for the next few sessions. Immediate support is placed at 13300.

Source : Equity Bulls

Keywords