Technical View - Dec 11, 2020 - Nagaraj Shetti, Technical & Derivatives Analyst, HDFC Securities Ltd

Volatile movement continued in the market for the second consecutive sessions on Friday and Nifty closed the day higher by 35 points. Nifty opened on a positive note, made an attempt to move up after the opening. It registered a new all-time high of 13579 in the early part of the session. Weakness triggered from the new high and the decline got intensified in the afternoon session. The mid to later part upside recovery has lifted the sentiment back into bulls and Nifty closed the day with upside recovery note.

A Doji type candle was formed on the daily chart (identical open and close with upper and lower shadow), which formed amidst a range movement. Normally, a formation of Doji after the reasonable upmove could be considered as a warning signal for trend reversal pattern. But having formed this Doji pattern in a broader range movement, the negative implication could be less.

Nifty formed a long bull candle as per weekly timeframe chart, which is back to back two long bull candle after the consolidation of previous couple of weeks. Though, the market is showing signs of consolidation at the highs, still there is no indication of any reversal pattern at the new highs, as per daily and weekly timeframe chart.

Conclusion: The short term trend of Nifty is range bound with volatility. The present consolidation movement could eventually result in an upside continuation by next week. A sustainable upmove above 13600 levels is expected to pull Nifty towards 13900 levels in the near term. Immediate support is placed at 13400.

Source : Equity Bulls

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