Technical Wrap - June 23, 2023 - HDFC Securities

Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After resuming weakness from the new swing high of 18886 levels on Thursday, Nifty continued with sharp follow-through declines on Friday and closed the day lower by 105 points. After opening with a negative note, the market slipped into further down side in the early part of the session. An attempt of upside recovery of mid part has faltered and the selling pressure has observed again towards the later part of the session.

A long bear candle was on the daily chart, which is back to back in the last two sessions. Immediate support of daily 10 day EMA has been broken on the down side at 18730 and Nifty tested another support of 20 day EMA around 18650 levels. The 20 period EMA on the daily chart was sustained in the last few months and witnessed upside bounces from its support during dips in the past. Hence a decisive move below 18650 levels could open sharp weakness for the underlying Nifty.

Nifty on the weekly chart formed a long bear candle from the highs. Technically, this pattern signal formation of 'dark cloud cover' pattern at the swing highs. Previous such reversal patterns in the past have witnessed substantial weakness in the market.

The short term trend of Nifty is about to reverse on the downside. Further decisive weakness from here could open intense selling pressure for the coming week. Next lower support is at 18370-weekly 10 period EMA. Any upside bounce could encounter hurdle at 18760 levels.

Source : Equity Bulls

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TechnicalWrap Nifty Sensex HDFCSecurities