Below is the Views On Technical Quote On Today`s Market Performance by Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing a lackluster type movement in the last few sessions, Nifty witnessed sharp fall on Friday and closed the day lower 122 points. A long negative candle was formed, which indicates a downside breakout of the recent sideways range movement. This pattern signal beginning of profit booking from the highs in the market.
The positive sequential movement like higher tops and bottoms continued in the market and the recent swing high of 11373 of 11th Aug could now be considered as a new higher top of the sequence. Hence, one may expect further weakness in the short term.
The previous market action during higher bottom formations have consumed two day's of decline, after downside breakout/reversal from the highs (for two occasions - mid of July and early Aug 2020). As per this pattern one may expect another 2-3 sessions of weakness before showing any upside bounce again from the lows.
Nifty formed a small negative candle on the weekly chart, which signal a formation of high wave type candle pattern. We also observe a broader range movement on the weekly chart over the last one month, with alternative candle formation of bull and bear. This weekly broader range movement has occurred below the significant overhead trend line resistance of around 11400-11500 levels, as per the concept of change in polarity. Hence, intra-week decline and lower levels recovery can't be ruled out in the next week.
The short term trend of Nifty has turned down and one more expect some more weakness in the coming sessions. The crucial lower supports to be watched around 11000-10950 in the next few sessions, before showing any upside bounce from the lows. However, the short term trend of Nifty seems to have reversed, but the intermediate trend remains intact. This is valid as long as the important lower support of 10900 levels holds.
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