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

After showing fine upside recovery from the lows on Monday, Nifty witnessed a sharp sell on rises action on Tuesday and showed sharp weakness. After opening on an upside gap of 53 points, Nifty made an attempt to move up in the early part of the session. Intraday weakness got triggered from a day's high of 14723 and the market started weakness from the highs. Intraday upside recovery attempt has failed and the weakness got intensified in the afternoon to later part of the session and the market closed near the lows.

A long negative candle was formed after a opening higher and the negative candle has engulfed more than 3/4th of previous bullish candle of Monday. This is negative indication and signal a lack of strength in the market to sustain highs or sharp sell on rise is underway. This pattern could signal further weakness down to the immediate support of 14400 or lower in the short term.

A decisive move below 14400 could pull Nifty down to a crucial lower support band of 14200 -14150 levels and that support area is expected to offer support for the market from the lower levels. The higher bottom formation at the low of 14416 of Monday has not been confirmed on Tuesday and that pattern is now placed at the danger of negation.

Nifty as per weekly chart indicate that the market is struggling to sustain the highs, after a fine intra-week upmove of last week.

Conclusion: The lack of strength to sustain the highs continued in the market and the fine upside bounce of previous session has been negated. The market could slide down further and the next set of supports are seen around 14400 and the next 14200-14150 levels, where one may expect another round of upside bounce from the lows. On the way up 14600-14650 could act as a hurdle.

Source : Equity Bulls

Keywords