Technical View - Nov 26, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing minor pullback rally on Thursday, Nifty witnessed bloodbath on Friday and tanked down by 509 points. After opening with a downside gap of 198 points, the weakness continued for entire session. Intraday pullback rallies in between were sold off and Nifty made a new swing low of 16985 levels towards the end. The opening downside gap remains unfilled.

A long negative candle was formed on the daily chart with gap down opening. Technically, this action indicates sharp downside breakout in the market after a minor upside bounce. This also reflects a strength of a down trend compared to minor recent upside bounce. This signal chances of more weakness in the coming weeks.

The negative chart pattern of lower high and lower low pattern was formed on the daily chart and present downward correction could be a part of lower low formation. Still there is no indication of any lower bottom formation at the lows.

A long bear candle was formed on the weekly chart and the crucial lower support of 20week EMA has been violated on the downside as per close of the week. The 20w EMA has been offering support for the Nifty in the last many months and its downside breakout could have further negative implication on the market ahead.

Conclusion: The market has been in a steep fall and more weakness could be in store. The downside breakout of the crucial supports and the overall negative chart pattern as per daily and weekly timeframe indicate resumption of sharp down trend in the market. The next lower targets to be watched for Nifty around 16500 levels in the next couple of weeks. Any pullback rally from here could find strong resistance around 17200 levels.

Source : Equity Bulls

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TechnicalView HDFCSecurities Nifty