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Market Commentary
Technical View - May 28, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Posted On : 2021-05-29 13:25:58( TIMEZONE : IST )
The upside momentum continued in the market on Friday and the Nifty registered all time high of 15469 levels and closed the day higher by 97 points. After opening on an upside gap of 84 points, Nifty shifted into a range bound action with positive bias, which continued for the whole session. Intraday minor dips in between were used to move up further and the market finally closed near the highs.
A small positive candle was formed with minor upper and lower shadow as per daily time frame chart. Technically this signal a formation of high wave type candle pattern at the new highs and this is back to back two high wave candle patterns in the last two sessions. Normally, a high wave pattern formation after a reasonable highs or at resistance could be considered as a reversal pattern, post confirmation. But, absence of confirmation after a last pattern, one may expect this to be an uptrend continuation for the short term.
The resistance of 15350-15450 (previous swing highs) has been taken out on the upside and the market has registered a new all time high on Friday. Though Nifty moved above the previous swing high at 15431- of 16th Feb 21, there is no indication of any reversal pattern/emergence of selling pressure from the highs. The opening upside gap of Friday remains intact. This is positive indication.
Nifty on the weekly chart formed a long bull candle, after an upside breakout of the multi-month trend line resistance in the previous week around 15K mark. This pattern could be a validation of upside breakout on the weekly chart.
Conclusion: The short term trend of Nifty continues to be positive. Having, moved above the resistance at 15430, one may expect further upside in the coming sessions. The next upside targets to be watched around 15800 (pattern target of broader high low range breakout at 15000-14200 levels and this could be achieved in the next one week. Immediate support is now placed at 15350-15300 levels.
