Technical View - Jan 13, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Nifty witnessed high volatility on Wednesday at the new high of 14653 and closed the day on a flat note. Nifty opened on a positive note, made an attempt to move up in the early part of the session. A gradual higher levels weakness has started amidst a range movement from the all time high and the weakness got intensified in the afternoon session. A smart upside recovery has emerged from the day's low in the mid to later part and Nifty erased entire intraday loss towards the end to close flat.

A long negative candle was formed with lower shadow on the daily chart. Though, this pattern indicate high volatility in the market, still there is no formation of any reversal in Nifty at the highs. Hence, one may expect further upmove with range move in the coming sessions.

The overall market breadth has turned negative, with Advance: Decline ratio closing at 634:1258 and neutral at 82. The negative market breadth was mainly due to the weakness in the broad market indices of NSE like midcap 100 and small cap 100 by around 0.60% and 0.18% respectively.

The banking sector stood firm today and outperformed benchmark index. After showing an upside bounce of previous few sessions minor decline on Tuesday, the Bank Nifty has recovered smartly on Wednesday from a intraday weakness and closed higher. The new all time high was registered at 32683 on Wednesday. Hence one may expect further upmove in the banking sector in the coming sessions. The upside levels to be watched at 33000 in the next few sessions.

Conclusion: Though, the market witnessed higher level weakness on Wednesday, still there is no indication of reversal pattern forming at the new highs. Hence, there is a possibility of further upmove amidst a range movement in the next 1-2 sessions. Upper levels of 14655 is going to be a short term resistance and lower 14450 is expected to be an immediate support for the market.

Source : Equity Bulls

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