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Market Commentary
Technical View - July 7, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Posted On : 2021-07-07 16:54:42( TIMEZONE : IST )
After witnessing a weakness at higher levels on Tuesday, Nifty shifted into a sustainable upmove amidst a range movement on Wednesday and closed the day higher by 61 points. The Nifty opened on a weak note and shifted into an upside recovery soon after the opening. It later moved into a range move in the mid part of the session and the buying has emerged again in the afternoon to later part of the session. Nifty closed near the highs.
A reasonable positive candle was formed on a daily chart with long lower shadow, after a doji formation on Tuesday. Technically this pattern indicate a counter attack of bulls from the lower levels. Hence, the current market action post formation of grave stone doji of previous session signal negation of bearish implication. A sustainable move above the high of doji at 15915 could entirely nullify the bearish effect and that could open more upside in the short term.
Therefore, there is no confirmation of negative reversal pattern and this could open more upside in the short term. The immediate support of 10 day EMA as per daily chart has once again offered support for the market on Wednesday and resulted in upside bounce.
Now, there is another chances of Nifty reaching towards the crucial upper resistance of 15900 levels again in the next 1-2 sessions. We observe decreasing downside strength during pullback declines after hitting the said hurdle in the last three occasions. Such repeated testing of crucial resistance with decreased downside momentum during pullback could eventually result in a decisive upside breakout of the resistance (15900) in the near term.
Conclusion: The short term uptrend status of the market remains intact and the market is inching closer to witness sharp upside breakout of 15915 in the next couple of sessions. Intraday consolidation could be expected in the subsequent session around the hurdle before the upside breakout. The next upside target to be watched post upmove is around 16100-16200 in a short period of time. Immediate support is placed at 15800.
