Technical View - Feb 4, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing volatility on Wednesday, Nifty continued with upside momentum on Thursday and closed the day with decent gains of 105 points. After opening on a negative note, Nifty slipped into weakness amidst a range movement in the early part of the session. A sustainable upside bounce has occurred from early to mid part of the session and that continued till the later part of the session. New all time high was formed at 14913 and Nifty closed near the highs.

A small positive candle was formed with minor lower shadow. Technically, this pattern could signal uptrend continuation pattern, after the formation of high wave type confusing candle on Wednesday. Hence, one may expect further upside in the short term.

The opening upside gap of 2nd Feb remains unfilled, three sessions after its formation. If this gap is unchallenged in the next couple of sessions, then that could be considered as a bullish breakaway gap, which are normally associated at crucial bottom reversals. Such happening could hint at more upside for the market in the near term.

Nifty on the weekly chart has completely reversed the negative candle of last week. As happened in previous few occasions, the sharp up trended move could continue after such negation of bearish pattern.

Conclusion: The short term trend of Nifty continues to be positive. Present close above the long term trend line resistance of around 14800 levels could eventually have further positive impact on the market in near term. The next upside target to be watched at 15475, which is 1.618% fibonacci extension (taken from the swing high of Jan 2020 and March 20 low). Immediate support is placed at 14750.

Source : Equity Bulls

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