Technical View - Sep 29, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing sharp weakness and and intraday upside recovery on Tuesday, Nifty shifted into a consolidation with weak bias on Wednesday and closed the day lower by 37 points. After opening on a downside gap of 91 points, the market moved into a range bound action with weak bias in the early-mid part of the session. A promising upside recovery has emerged in the mid to later part, but the market was not able to close at the highs.

A small positive candle was formed at the lows with minor upper and lower shadow. Technically, this pattern indicate a formation of high wave type candle pattern. Normally, such formations after a reasonable decline could hint at a possibility of halt in present trend and this needs to be confirmed with reasonable upmove in the subsequent sessions.

The smaller degree of positive chart pattern like higher tops and bottoms as per daily chart is intact. It is evident from the daily chart that market reversed its trend after couple of sessions declines in past. Hence, any positive close on Thursday could bring bulls back into action for the short term.

The crucial support of 10 period EMA on the daily chart is intact and this average has been offering crucial supports for the Nifty on dips for many occasions in the last 35-40 sessions. Having sustained above this support on Tuesday and Wednesday, the odds of upside bounce is likely in the coming sessions.

Conclusion: The short term trend of Nifty remains negative. But, lack of sharp follow-through selling and an emergence of buying from the lower supports suggest chances of upside bounce in the market in the next 1-2 sessions. A sustainable move above the immediate resistance of 17800 could open strong upside bounce towards 18K mark. Immediate support is placed at 17580-17600 levels.

Source : Equity Bulls

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