Technical View - Jan 6, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing consistent upmove over the last ten sessions, Nifty halted its upside momentum on Wednesday and shifted into a profit booking mode amidst a volatility and closed the day lower by 53 points.

After opening on a slightly positive note on Wednesday, the market has shifted into a range move with weak bias in the early to mid part of the session. The weakness got intensified in the mid part on the volatile global cues and Nifty shifted into a firm upside recovery in the mid to later part of the session. The overall market breadth was slightly down and the broad market indices like NSE mid cap 100 has closed higher by 0.55% and small cap 100 closed on a flat note.

A reasonable negative candle was formed with lower shadow on the daily chart, beside the positive candle of Tuesday. Technically, this pattern indicate minor profit booking at the new swing highs. Though, Nifty declined on Wednesday, the uptrend status of the market remains intact and there is no formation of any significant reversal pattern at the highs.

The Nifty has been sustaining above the immediate support of 10 period EMA for the last 50 sessions, except two days of high volatility (21st and 22nd Dec 20) as per daily timeframe chart. Presently, this moving average is offering support at 13970 levels and this area is going to be crucial for the short term trend reversal.

Conclusion: Wednesday's decline with volatility could be a minor profit booking in the market at the new highs. The underlying short term uptrend remains intact and we are likely to see buying emerging in the coming sessions. Important lower supports to be watched at 13970 and the next upside resistance is at 14310.

Source : Equity Bulls

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