Technical View - Jan 20, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Nifty continued with a sustainable upmove for the second consecutive session on Wednesday and closed the day higher by 123 points. Nifty opened on a positive note, shifted into a further upside in the early part of the session before shifting into an intra-day range move. Minor dips of mid part has turned out to be a buy on dips opportunity and Nifty registered a new all time high at 14666 towards the end.

Another long bull candle was formed, which indicate an uptrend continuation pattern. The previous four sessions decline has been retraced completely in the last two session. This faster retracement could signal further upside in the short term.

The positive sequence like higher highs and lows continued on the daily chart and Nifty is currently making an attempt to reach higher highs. Previously, the short term downward corrections have resulted in a sustainable upside for many sessions. Hence, having moved up sharply from the higher bottom in the last two sessions, Nifty is expected to show further upside gradually.

The immediate support of 10 day EMA has proved to be a false downside breakout and that led to a sharp upside reversal. As per this pattern, this 10 period EMA could be tested again during next dip, after moving into new highs above 14666-14700 levels. On the upper side, the long term trend line resistances (top-top and bottom-bottom, as per monthly chart) could come into play.

Conclusion: The short term trend of Nifty continues to be positive and Wednesday's upmove could be a confirmation of bullish reversal from the lows. One may expect further upside for the next few sessions, before encountering a next crucial overhead resistances around 14800 levels. Immediate support is at 14550.

Source : Equity Bulls

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