IGI Logo

Daily Technical View on Nifty

Sharp downward reversal..

Observation: After showing upside bounce from the lows in the last few sessions, Nifty witnessed sharp selloff on Tuesday and closed the day lower by 333 points. After opening with an upside gap of 145 points, the market has started to show decline from the highs since opening.

The weakness got intensified in the mid to later part of the session and the Nifty closed near the lows.

The opening upside gap has been filled completely. A long bear candle was formed on the daily chart, which is indicating a sharp downward reversal in the market after a minor upside bounce of the previous few sessions.

After the formation of bullish chart pattern like higher tops and bottoms in the last two months, Nifty has started to form a bearish pattern like lower tops and bottoms. The new lower top was formed on Tuesday at 21750 levels and one may expect more weakness from here to form a new lower bottom of the sequence.

Conclusion: The short-term trend of Nifty is down and one may expect more weakness in the short term.

The next important support zone to be watched around 20950-20850 levels, which are coinciding with supports of previous up gap of 14th Dec, swing low of 21st Dec and also 38.2% Fibonacci retracement of Oct 23 bottom to Jan 24 top. Immediate resistance is at 21400 levels.

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337