Technical View - July 2, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing weakness with range bound action in the last four sessions, Nifty finally bounce back from the lows on Friday and closed the day higher by 42 points. After opening on a positive note, Nifty witnessed usual weakness with range movement in the early part of the session. A sustainable upmove has emerged from the day's low of 15635 and the upside bounce continued for rest of the session.

A small body of positive candle was formed on the daily chart with long lower shadow. Technically, this pattern signal a formation of bullish hammer type candle pattern at the lows (not a classical hammer). This is positive indication and could be considered as a bullish reversal after the confirmation.

Nifty sustained above the important cluster support of 20 day EMA, a halfway support of 21st June long bull candle around 15650 levels and we observe a formation of reversal type candle pattern at the crucial support. Previously, the market has witnessed a reasonable upside bounce from the support of 20 day EMA in past.

Nifty seems to have formed a higher bottom at 15635 on Friday, compared to the previous higher low of 18th June at 15450. This could raise higher possibility of Nifty once again approaching upper resistance of around 15900.

Nifty on the weekly chart formed a negative candle with minor lower shadow. This candle has overlapped previous weekly bullish candle. This action signal buy on dips opportunity in the market after the weakness.

Conclusion: The bulls seems to have come back gradually from the lower support on Friday. Confirmation of bullish reversal by the way of follow-through upmove is likely to open further upside towards 15900 levels again in the near term. Immediate support is placed at 15650 levels.

Source : Equity Bulls

Keywords