Technical Wrap - June 1, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

Consolidation movement with weak bias continued in the market for the second consecutive sessions on Wednesday and Nifty closed the day lower by 61 points. After opening on a positive note, the market made an attempt to move up in the early part of the session. The weakness got triggered in the mid part and a sustainable upside recovery was seen towards the end.

A small negative candle was formed on the daily chart with upper and lower shadow. Technically, this pattern indicate a formation of high wave type candle pattern, which displays high volatility in the market. Normally, such high wave formations after a reasonable upmove or down moves act as an impending trend reversals. But, having formed this pattern within a range movement, the predictive value of this pattern could be less.

The near term uptrend status remains intact for Nifty on the daily chart and the smaller degree of higher tops and bottoms is also active. After the upside breakout of hurdle at 16400 levels on Monday, Nifty showing minor weakness down to the previous upside breakout area (16400 levels) could be considered as an important support for the market. Other supports like daily 10 and 20 period EMA are also placed around 16400 levels.

Conclusion:The near term uptrend of Nifty remains intact and present consolidation or minor weakness could be considered as a buy on dips opportunity for the short term. The market could shift in to another 1 or 2 sessions of range move or minor weakness, before showing a sharp upside bounce from the lows. The near term upside target remains intact at 16800 levels.

Source : Equity Bulls

Keywords

TechnicalWrap HDFCSecurities Nifty Sensex