Technical View - Jan 14, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After witnessing a high volatility on Wednesday, Nifty shifted into a minor upmove with range bound action on Thursday and closed the day higher by 30 points. After opening on a negative note, Nifty slipped further soon after the opening. A sustainable upside recovery has emerged from the day's low of 14471, the market erased intraday loss in the early -mid part and sustained with minor gains towards the end.

A small positive candle was formed on Thursday with minor lower shadow. This candle was placed beside the negative candle of previous session. Technically, this pattern indicate a range movement in the market with buy on dips nature. This is positive indication and further range movement in the market could open more space for upside in the short term.

The overall market breadth has recovered towards the close, after showing negative sign in the early part of last session. The broad market indices like midcap 100 and small cap 100 of NSE have closed on a slightly positive note.

Now, the Nifty is gradually moving away from the short term support of 10day EMA as per daily timeframe chart. The one day drop in the index is expected to reduce the gap by reaching the support of this moving average (10 day EMA is at 14338). The pattern of 16-18 days of consumption before showing one day sharp decline is intact and 17 sessions have already been passed after last one day sharp decline of 21st Dec. Hence, one may expect another leg of higher levels profit booking on any rise from here.

Conclusion: The underlying trend of Nifty remains range bound with positive bias. There is a possibility of further upside and new high formation above 14653 levels in the next couple of sessions, but one needs to be cautious about sharp profit booking from the new highs in the next 1-2 sessions. Immediate support is placed at 14460 levels.

Source : Equity Bulls

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