Technical Wrap - June 7, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing consolidation type movement at the support of 16450-16400 levels on Monday, the Nifty slipped into weakness on Tuesday and closed the day lower by 153 points amidst range movement. After opening on a negative note, the market showed weakness in the early part of the session. Minor upside recovery has emerged in between, but the underlying shifted in to a range bound action till the end.

A small negative candle was formed on the daily chart with minor lower shadow. Technically, this pattern signal weak trend with range bound action. Nifty is currently placed at the edge of breaking below the crucial support of 16400 levels (support as per change in polarity and daily 10 and 20 day EMA). But, minor buying is still emerging from the lows.

The market is waiting for the trigger from RBI's mid quarter policy review meet, which is expected to decide on monetary policy tomorrow. The negative outcome could trigger more weakness and any positive or status quo approach could bring bulls back into action.

The positive sequence like higher tops and bottoms is intact as per daily chart. The present weakness is expected to form a new higher bottom of the sequence. Hence, the market action in the next 1-2 sessions could decide the course of action.

Conclusion: The short term trend of Nifty continues to be negative. Formation of small negative candles with lower shadows on the downside and placement of crucial supports, one may expect Nifty to witness sustainable upside bounce from the lows of 16300-16250 levels in the next 1-2 sessions.

Source : Equity Bulls

Keywords

TechnicalWrap HDFCSecurities Nifty Sensex