Technical View - Aug 9, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The choppy movement continued in the market for the third consecutive session and Nifty closed the day higher by 20 points amidst a volatile movement. After opening on a positive note, the market made an attempt to move up in the early part of the session. Intraday weakness got triggered from a day's high of 16320 levels and the Nifty witnessed sharp intraday weakness in the mid part of the session. A sustainable upside recovery has occurred in the afternoon to later part and Nifty closed the day higher by completely erasing the intraday loss.

A small negative candle was formed on the daily chart with upper and long lower shadow. Technically, this pattern indicate a continuation of range bound action in the market. The formation of long lower shadow in daily candle signal emergence of buying interest from the lows.

After a sharp upside breakout of the broader high low range at 16K levels recently, the underlying shifting into a narrow range movement without showing any major decline could be considered as a breather pattern and this action indicate a buy on dips opportunity near the upside breakout point around 16100-16200 levels, as per the concept change in polarity.

Conclusion: The short term trend of Nifty remains choppy. The recent upside breakout of broader range is still intact. The present consolidation/minor weakness is unlikely to damage the sentiment post upside breakout. We expect Nifty to show sharp upside bounce again from near the support of 16100 levels in the next couple of sessions. A decisive move above 16350 could pull Nifty towards 16500 in the near term.

Source : Equity Bulls

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