Technical View - Feb 1, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a sharp weakness in the last six sessions, Nifty witnessed an excellent comeback on Monday on the day Union Budget 2021 and witnessed hefty gains of 646 points. After opening on a positive note, the market shifted into a minor consolidation in the early part of the session. As union budget presentation starts in the parliament, the upside momentum got picked up and it further strengthened towards the afternoon to later part of the session and closed near the highs.

The overall market breadth has turned positive and the broader market indices like midcap 100 and small cap 100 of NSE have closed higher by 3.30% and 2.01% respectively. But the sharp upside was seen in the sectors like Banking, Financial and Realty with the gains of more than 6%.

Along bull candle was formed on Monday, that has engulfed the last three sessions weakness in one day. This pattern could be considered as a strong comeback of bulls, after a six sessions of weakness. Hence, the recent swing low of 13596 could be considered as a new higher bottom of the sequence. This one large bull candle has changed the short term sentiment of the market.

Nifty on the weekly chart formed a counter attack bull candle so far, which indicate that the near term top reversal pattern that followed by last 6 sessions decline could be in danger of negation. If Nifty manages to sustain above 14753, then the bearish reversal pattern could be negated and the Nifty could scale further highs.

Conclusion: The sharp upside momentum of the market on the union budget day seems to have changed the sentiment of the market. The union budget has turned out to be an event for the market so far now. The next important hurdles to be watched are 14600 and the next 14753. At lower side the area of 14000 could be a crucial support for the market ahead.

Source : Equity Bulls

Keywords