Technical Wrap - August 23, 2022 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing sharp weakness from the highs in the last couple of sessions, Nifty witnessed a decent upside bounce from the lows on Tuesday and closed the day higher by 86 points. after opening with a negative note, the market shifted into an upside recovery since opening and the upmove continued for mid to later part of the session. The upside momentum got strengthened towards the end and Nifty closed near the highs.

A long positive candle was formed on the daily chart after opening lower. Technically, this pattern indicates a formation of bullish Piercing Line type candle pattern (not a classical one). Normally such bullish piercing line pattern after a reasonable decline indicate upside reversal of a short term down trend. This also reflect a strength of a pullback rally after a steep weakness. Hence, one may expect upside bounce in the short term.

The Nifty held above the support of 23.6% fibonacci retracement at 17330 levels (connected from the bottom of June to high of 19th Aug) before showing upside bounce. Normally, the underlying bouncing back from such initial retracement signal strength of its long term trend.

Conclusion: The decent pullback rally from the lows of Tuesday could be a cheering factor for bulls to make a come back. Further follow-through upmove from here and a sustainable move above 17800 levels could open further upside for the short term. Any failure to sustain the highs is likely to bring bears into action again. Immediate support is placed at 17500 levels.

Source : Equity Bulls

Keywords

TechnicalWrap HDFCSecurities Nifty Sensex