Technical View - Sep 8, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing a range bound movement with weak bias on Tuesday, Nifty witnessed volatile session on Wednesday and closed the day lower by 08 points. After opening on a positive note, the market slipped into minor weakness in the early part of the session. Later it shifted into a range movement for some time in the early-mid part. The weakness got intensified in the afternoon, but sharp intraday upside recovery has witnessed from a day's low of 17254 levels and the market closed the day by erasing most of the intraday loss.

A small body of negative candle was formed on the daily chart with long lower shadow. Technically, this formation indicate a hammer type candle pattern (not a classical one) at swing lows. Normally, a hammer formation after a reasonable decline/at swing lows more often result in a bottom reversal pattern post confirmation. Hence, a positive session on Thursday could mean a formation of minor bottom reversal and chances of more upside.

The minor decline of the last couple of session, post sharp upside momentum and a formation of lower shadow's in the last two daily candles could signal lack of sharp selling participation near the new highs. This is positive indication and there is a possibility of sharp upside bounce soon in the market.

Though, Nifty showed intraday weakness on Wednesday, the overall market breadth was resilient. The broad market indices like mid cap and small cap segments of NSE exchange have closed the day higher by 0.52% and 0.65% respectively.

Conclusion: The present short term consolidation movement is expected to end soon and that could open a decisive upside bounce from the lows in the next 1-2 sessions. The confirmation of higher bottom is likely to pull Nifty towards 17550-17600 levels by next week. Immediate support is placed at 17250 levels.

Source : Equity Bulls

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