Technical Wrap - March 11, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing high volatility at the crucial overhead resistance of around 16800 levels on Thursday, Nifty shifted into a consolidation pattern after a early part of weakness on Friday and closed the day higher by 35 points. After opening on a negative note, the market sipped into further weakness soon after the opening. It later showed a fine intraday upside recovery from the lows of 16470 levels, but failed to show any follow-through buying at the highs.

A small positive candle was formed at the highs on the daily chart, which indicate a range bound action for the market. This cooling off of the short term trend was due after a sharp upmove of around 1000 Nifty points in the previous three sessions. Having placed at the crucial overhead resistance of 16800-17000 levels, further consolidation movement with high volatility is expected.

The broader negative pattern like lower highs and lower lows is intact in Nifty as per daily chart. A decisive upmove above the hurdle of 16800-17000 levels not only negate this bearish setup but also change the whole pattern towards upside. Inability to surpass above the hurdle could trigger another round of weakness from the highs. A bullish engulfing type candle pattern was formed on the weekly chart, which is not a classical one. The market registered a decisive upside bounce in this week, which was absent in the last 5-6 weeks, according to weekly timeframe chart.

Conclusion: The short term uptrend of Nifty remains intact with high volatility. Having placed near the crucial overhead resistance of around 16800-17000 levels, there is a possibility of further consolidation movement for the short term. Weakness from the highs can't be ruled in the coming session. Immediate supports to be watched at 16450 levels.

Source : Equity Bulls

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TechnicalWrap HDFCSecurities Nifty Sensex