Technical View - Sep 28, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing consolidation type movement in the previous couple of sessions, Nifty witnessed high volatility on Tuesday and closed the day lower by 106 points. After opening on a positive note, Nifty slipped into weakness since opening. The minor upside recovery attempts in between were used to go short at the highs and this action continued for better part of the session. The sharp intraday buying has emerged from a day's low of 17576 and the market has finally closed lower by erasing most of intraday loss.

A long negative candle was formed as per daily timeframe chart with long lower shadow. Technically, this pattern indicate a broad based profit booking from recent new highs of 17947 levels. The sharp upside recovery of later part of Tuesday's session signal absence of any significant trend reversal at the highs.

The smaller degree of higher tops and bottoms is intact on the daily timeframe chart. Tuesday's weakness could be in line with the formation of new higher bottom at the lows. Hence, any sustainable upmove from the lows in the coming session could confirm a higher bottom reversal and that is expected to open another round of upside for the markets.

The immediate support of 10 day EMA is intact and the Nifty witnessed upside bounce from this moving average on Tuesday after violating below it. In the last 35-40 sessions, the market has been sustaining above this moving average and showing upside bounces from the lows. This is positive indication.

Conclusion: The market encountered resistance again at the new highs and witnessed sharp intraday profit booking. The near term trend setup of Nifty is still positive and one may expect buying to emerge from the lows in the next 1-2 sessions. Immediate supports to be watched at 17650-17575 levels.

Source : Equity Bulls

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