Technical Wrap - March 7, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

The sharp downside momentum continued in the market for the third consecutive sessions in a row on Monday and Nifty closed the day lower by 382 points amid volatility. After opening with a huge downside gap of 378 points, Nifty slipped into weakness in the early part of the session. Sharp intraday upside recoveries were seen in the mid to later part of the session and finally Nifty closed the day by erasing some of intraday loss towards the end.

A small body candle was formed at the lows on the daily chart with long lower shadow. Technically, this pattern indicate a doji type candle formation at the lows. Normally, a formation of such doji patterns after a reasonable upmoves or down moves could be considered as a an impending reversal pattern post confirmation. Hence, there is a possibility of an upside bounce in the short term.

The negative chart pattern of lower tops and bottoms is continued and present swing low of 15711 could signal a possible formation of new lower bottom. Though, Nifty placed at the lows, still there is no confirmation of any lower bottom reversal as of now. A decisive upside from here or from the lows could confirm a short term bottom reversal and that could open a possibility of an upside bounce in the market.

Conclusion:The short term trend of Nifty continues to be weak. The last hour upside recovery of Monday could bring some hopes of pullback rally in the short term. A sustainable upside bounce is expected from there or from the lows of 15700-15500 levels in the next few sessions.

Source : Equity Bulls

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TechnicalWrap HDFCSecurities Nifty Sensex