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

After showing a violent decline on Monday, Nifty witnessed an excellent upside bounce on Tuesday and closed the day higher by 194 points. After opening on a positive note, Nifty showed minor volatile movement within range bound action till the mid part of the session. A sustainable buying has emerged in the afternoon and Nifty moved up sharply towards the end and closed near the highs.

A long bull candle was formed with minor lower shadow. Technically, this pattern indicate a counter attack of bulls from the lows and this could open up more upside bounce in the short term. The sustainable upside bounce of Tuesday has also raised hopes for bulls to show another meaningful upmove from the important lower support and also lower range of around 14300 levels (previous opening upside gap of 2nd Feb and previous swing lows). Previously, the market witnessed sustainable upside bounces from near this support towards the highs of 14900 levels.

Hence, there is a possibility of history repeating again. Technically, the false downside breakout of the lower range at 14300 could mean chances of underlying testing the upper range of around 14900 levels in the near term. Follow-through upmove from here is expected to confirm this pattern.

Nifty on the weekly chart has sustained the weekly 20 period EMA at 14200 levels and showed intra-week upside bounce so far from the lows. Further upmove from here could regain the area of previous broken support of weekly 10 period EMA around 14650 levels. This is going to be positive for the markets.

Conclusion: The absence of follow through weakness on Tuesday and a strong comeback of bulls from the crucial lower supports/range could mean more upside in the short term. The formation of present pattern and the confirmation in the next sessions (follow-through upmove on Thursday) could eventually indicate a chances of revisit of the upper range of around 14800-14900 levels in the coming weeks. Immediate support is placed at 14420.

Source : Equity Bulls

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