Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing consolidation movement on Tuesday, Nifty continued with choppy movement on Wednesday and closed the day lower by 39 points. After opening with a positive note, the market has shifted into a narrow range movement for the entire session. The attempt of upside bounce from the lows has failed to sustain and the market showed minor weakness from the highs towards the end.
A small negative candle was formed on the daily chart with minor upper shadow. Technically, this pattern indicate a lackluster type movement in the market. Though, Nifty placed at the crucial support of 15600-15700 levels (previous swing lows), the market is struggling to show any meaningful upside bounce from the support. The current chart pattern indicate possibility of one more leg of downside before showing a sharp upside bounce.
Nifty as per long term charts like monthly has placed at the crucial lower support of 20m EMA and previous swing lows around 15600-15700 levels and the opening downside gap on the weekly chart is expected to be filled soon, as per its pattern like filling the gaps immediately after the opening in the past.
Conclusion: The short term trend of Nifty continues to be weak with range bound action. Such lack of strength at the important support signal chances of false downside breakout or one leg of downside before showing sharp upside bounce from the lows of around 15500 levels in the short term. Immediate resistance is placed at 15780.
