Technical View - July 16, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The range movement continued in the market on Friday and Nifty closed the day on a flat note. After opening on a positive note, Nifty made an attempt to move up in the early part of the session. It made a new all time high of 15962 levels and later shifted into a gradual weakness from the highs amidst a range movement. Minor upside recovery was observed in the afternoon to later part of the session and the opening upside gap has been filled completely.

A reasonable negative candle was formed with minor lower shadow on the daily chart. Nifty made an attempt to stage upside breakout of the month old consolidation pattern at 15915 levels on Thursday, but failed to gather strength in upside momentum to move up decisively on Friday. This lack of strength could be a cause of worry for the bulls at the highs.

If Nifty fails to sustain above 15960 levels in the next 1-2 sessions and corrects down, then such market action could be considered as a failed upside breakout and that could possibly start selling enthusiasm from the highs.

Nifty on the weekly chart formed a reasonable positive candle, beside the negative candle of previous week. On the weekly chart, the market has been showing a range bound movement at 15900-15950 levels over the last one month.

Conclusion: The range bound action continued in the market and the Nifty failed to show decisive upside breakout on Friday. At the same time the weakness from the highs has not negated the bullish sentiment of the market. A display of strength above 15960 could only open the next upside levels of 16100-16200 in the short term. Any weakness below 15850 is likely to trigger broad based downward correction in the market.

Source : Equity Bulls

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