Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After the formation of bullish candlestick pattern like inside day on Wednesday, Nifty witnessed an excellent upmove on Thursday and closed the day higher by 256 points. After opening on an upside gap of 91 points, the market continued its uptrend for the whole session. Intraday minor dips in between have been bought into and the market closed near the highs. The opening upside gap remains unfilled.
A long bull candle was formed on the daily chart, that has surpassed the hurdle of 17200 levels (up sloping trend line connecting previous swing lows). This candle pattern confirms a bullish reversal pattern for the short term. The recent swing low of Nifty at the support of 16825 could now be considered as a short term bottom reversal pattern.
Previously, the area of 17000-16800 levels have resulted in decisive moves on either side. The last downside breakout and the recent upside breakout around this area has resulted in a sharp follow-through moves in the index on either side. Having bounced up recently from near the 18000 levels again and the emerging strength of upside momentum indicate substantial upside from here.
Conclusion: The short term trend of Nifty continuous to be positive. A sustainable move above the immediate resistance of 17450-17500 levels could open the next upside levels of around 17800-18000 levels in the near term. Immediate support is placed at 17250.