The uptrend continued in the market on Tuesday, after showing volatility in the previous session and Nifty closed the day higher by 66 points. After opening on a downside gap of 58 point on Tuesday, Nifty showed smart upside recovery from the intraday lower support of 14080. The opening downside gap was filled and Nifty ended the day with handsome gains.
A long bull candle was formed on Tuesday, which indicates a confirmation of small upside breakout of the range at 14000 levels, which is positive indication. New swing high was formed at 14215 and Nifty closed near the highs.
We observe a strength in the upside momentum of Nifty over the last few months and one day sharp weaknesses have turned out to be a buy on dips opportunity in the market. Interestingly, the time consumed from previous to last one day decline is around 16-18 days (taken from the swing low of 24th Sept 2020) and this pattern has occurred for 3 occasions so far. The last one day drop has witnessed on 21st December 2020 and the next possible date for such a decline could be after 6-8 sessions (Between 13-15 Jan).
The long term charts like monthly timeframe signal sharp upside breakout of the intermediate trend line with confirmation (connecting monthly top to top at 12750-12800 levels) and this area is going to be a strong support during any sharp profit booking in the market.
Conclusion: The short term trend of Nifty remains positive. Though intraday profit booking is emerging from the new highs on daily basis, the strong buying is also witnessing on dips. The next Fibonacci projection resistance is at 14310 and the near term upside targets to be watched around 14600-14800 levels. Immediate support is placed at 14080.