Below is the Technical Quote On Today`s Market Performance by Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing sideways range movement in the last few sessions, Nifty witnessed sharp downside breakout of the lower range of 11075 levels on Monday and closed the day lower by 181 points. A long bear candle was formed, that moved below the crucial lower support of 10900 levels as per intraday and closed the day on a edge of that area.
The long term uprend line (connected from the bottom of March 2020 low at 7511 and rising lows) has been broken on the down side and Nifty closed below it in the last two sessions. This is negative indication and could confirm near term top reversal pattern in Nifty. Hence, one may expect further weakness in the coming sessions.
The positive chart pattern like higher tops and bottoms continued on the daily timeframe chart of the recent swing high of 11340 of 29th July could now be considered as a new higher top of the sequence. As per this theory, Nifty has a downside room up to 10600 to form any higher bottom formation of the sequence.
Nifty seems to have witnessed reversal from near the key overhead weekly resistance around 11300 levels in the last week (resistance as per change in polarity). A follow-through weakness so far in this week, after a reversal of last week and the significance of overhead resistance could point towards more downward correction in the market, as per smaller and larger timeframe charts
The short term trend of Nifty has reversed and the recent swing high of 11340 could be considered as an important top reversal pattern and this area is unlikely to be breached in a hurry. One may expect further weakness in the market in coming sessions. The next downside levels to be watched around 10600, which could be achieved in the next one week. Immediate resistance is placed for any pullback rally is at 11075 levels.
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