Technical View - Dec 18, 2020 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The gradual upmove with consolidation movement continued in the market for the seventh consecutive sessions on Friday and Nifty managed to close on a green amidst a volatility. After opening on a slightly positive note, Nifty slipped into intraday weakness in the early part of the session. A smart upside recovery has emerged from a day's low of 13658 and the upside recovery continued for the rest of the session. Nifty erased intraday loss completely and closed on a positive note.

Yet another small body candle was formed with long lower shadow, but new high was not formed on Friday. This again signal a formation of hanging man type candle pattern at the highs. Recently, we observe formation of few similar candle patterns on the day chart, but the market has continued its upside momentum with range movement. Hence, today's pattern formation could be considered as a buy on intraday dips in the market.

The overall market breadth continues with negative on Friday and broad market indices like midcap 100 and small cap 100 of NSE have closed mildly lower by 0.25% and 0.21% respectively. This indicates consolidation movement in the sector and one may expect resumption of upside in the broader market post range movement.

Long bull candle was formed on the weekly chart with minor lower shadow. This indicate a continuation of up trended move as per long term chart. Though, Nifty placed at the highs, there is no indication of any reversal pattern unfolding as per intraday/daily and weekly timeframe charts.

Conclusion: Nifty continued with range movement and showed upside recovery from the intraday dip. The consolidation movement could continue for the early part of next week, before showing further upside momentum in the mid part. The next crucial long term resistance to be watched around 13900-14000 levels for the next 1-2 weeks. Immediate support is placed at 13660.

Source : Equity Bulls

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