Technical View - July 6, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing sustainable upmove in the last couple of sessions, Nifty witnessed sharp intraday profit booking at the hurdle of 15900 levels and slipped into weakness on Tuesday and closed lower by 16 points. After opening on a slightly negative note, the market has shifted into a sustainable intraday upside move for the better part of the session. Intraday profit booking emerged from the day's high of 15014 at 1.54 pm and Nifty started gradual weakness from the highs. The intraday weakness got intensified in the later part of the session and closed near the lows.

A small body candle was formed with long upper shadow on the daily timeframe chart. Technically, this pattern indicate a formation of 'grave stone doji'. Normally, formation of such doji pattern at the hurdle/after the reasonable upmove could signal downward reversal in the underlying, post confirmation. Hence, bulls needs to be cautious about long positions at the highs and subsequent weakness from here is likely to bring bear's into action.

The upper area of 15900-15915 has been tested for four occasions in the last couple of months. Last turn down from this area has resulted in a minor downward correction amidst a choppy trend for four sessions in early part of June. Hence, the next move of index is going to be crucial. The intraday chart of 60 mins shows a formation of double top at 15915 levels.

Conclusion: The short term uptrend of Nifty seems to have encountered profit booking around 15900 levels again. Further weakness on Wednesday could confirm negative reversal and that could open another round of downward correction in the market from highs. A move above doji at 15915 could only negate this bearish pattern. Immediate support is placed at 15730.

Source : Equity Bulls

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