Technical Wrap - March 21, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing sharp upmove in the last couple of sessions, Nifty witnessed profit booking at the highs on Monday and closed the day lower by 169 points. After opening on a positive note, the market failed to sustain the highs and resumed its weakness from the early part. The weakness continued for the entire session and the attempt of upside recovery in between has been sold into.

A long negative candle was formed on the daily chart, that has marginally engulfed previous positive candle. Technically, this indicate a formation of bearish engulfing type candle pattern at the highs (not a classical one). Normally, such bearish pattern formations after a reasonable upmoves could signal impending trend reversal on the downside.

But, the market has witnessed an excellent upside breakout of the important cluster resistance of around 16800-17000 levels in last week. We also observe a formation of higher highs and lows during its recent upside bounce, which indicate a strength of an upside bounce. Hence, these market action signal chances of limited decline down to 17000 levels in the next few sessions, before showing another round of upside bounce from the higher bottom.

Conclusion: The profit booking of Monday seems to have not damaged the recent uptrend of the market. There is a possibility of upside bounce in Nifty from near the crucial lower support of 17000 levels in the next 1-2 sessions.

Source : Equity Bulls

Keywords

TechnicalWrap HDFCSecurities Sensex Nifty