Technical Wrap - Dec 27, 2021 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing weakness amidst a range movement on Friday, Nifty witnessed an excellent intraday buying from the lows on Monday and closed the day higher by 82 points. After opening on a downside gap of 66 points, the Nifty slipped into weakness in the early part of the session. A sustainable intraday upside recovery has emerged from a day's low of 16833 levels and the upside movement continued towards the end. The opening downside gap has been filled completely.

A long bull candle was formed on the daily chart with lower shadow. This bull candle has engulfed the previous negative candle partially on the upside. Technically, this pattern indicate a formation of bullish piercing line candle pattern, but formed at the wrong place at highs. Hence, one may expect further attempt to retest crucial overhead resistance of 17200 levels in the short term.

We observe an interesting weekly sequence of two weeks of pull back rallies before showing sharp weakness from the highs during its negative sequence of lower tops and bottoms. Having started the new pull back rally from the lows of 16400 levels in the last week, the odds of continuation of this upmove is higher this week before showing another round of sharp weakness from the highs by next week.

Conclusion: The short term trend of Nifty is slightly positive amidst a range movement. Further upside from here could encounter strong overhead resistance around 17200-17300 levels in the next few sessions and one may expect sell on rise opportunity. Immediate support is placed at 16930 levels.

Source : Equity Bulls

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