Technical Wrap - Feb 14, 2022 - Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After the beginning of weakness from the lower high on Friday, the Nifty witnessed bloodbath on Monday and closed the day with heavy loss of 531 points. After opening with a huge downside gap of 298 points, the market continued with declines in the early part of the session. Minor intraday upside recovery has emerged in mid part, but that was used as sell on rise opportunity. Nifty closed near the lows and the opening downside gap remains unfilled.

A long bear candle was formed on the daily chart with gap down opening. Technically, this pattern indicates a resumption of sharp trended declines from a lower top. The present unfilled opening downside gap could be considered as a downside breakaway gap. This is not a good sign and signal more weakness ahead.

After moving into a symmetrical triangle type pattern, the market has witnessed a sharp downside breakout of the pattern at 17150 levels. Hence, any attempt of upside bounce from here could be a sell on rise opportunity. The downside pattern target comes around 16200 levels.

The crucial lower support of ascending trend line (up trend line connecting previous swing highs and lows) as per weekly chart has been broken on the downside as per intra-week. The significance of this trend line indicates more weakness for the market ahead.

Conclusion:The near term trend of Nifty is sharply down. The overall negative chart pattern and a decisive downside breakout of the important support could indicate continuation of down trend for the market ahead. The initial downside targets to be watched around 16500 levels and next is at 16200, which could be achieved in the next couple of weeks. Any attempt of pullback rally could find strong resistance around 16950-17000 levels.

Source : Equity Bulls

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TechnicalWrap HDFCSecurities Nifty