Technical Wrap - Dec 24, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing upmove in the last three sessions, Nifty slipped into weakness on Friday and closed the day lower by 68 points. After opening with an upside gap of 77 points, the market has started to weaken soon after the opening. The intraday weakness got intensified in the early mid part of the session, but the market managed to show minor upside recovery amidst a range movement in the mid to later part of the session. The opening upside gap has been filled completely.

A reasonable negative candle was formed on the daily chart with minor lower shadow. The negative candle Friday has overlapped the small doji candle of Thursday. Technically, this pattern indicates a formation bearish engulfing pattern at the swing high. Normally, a formation of doji and bearish engulfing pattern back to back after a reasonable rise/ at the key hurdle could signal lower top reversal pattern.

The negative chart pattern of lower tops and bottoms is intact as per daily timeframe chart and Friday's high of 17155 could now be considered as a new lower top of the sequence. Hence, one may expect further weakness in the short term.

Nifty on the weekly chart formed a small bull candle with minor upper and lower shadow, which reflects a pullback rally of a down trend. The Nifty is now placed at the support of ascending trend line at 16780 levels as per the concept of change in polarity.

Conclusion: The recent pullback rally of the last three sessions seems to have completed around the strong overhead resistance of 17150-17200 levels. There is a possibility of further weakness down to 16700-16650 levels by next week. Any upside bounce from here could be a sell on rise opportunity.

Source : Equity Bulls

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TechnicalWrap HDFCSecurities Nifty Sensex