Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing weakness in the last few sessions, Nifty shifted into an upside bounce with volatility on Wednesday and closed the day higher by 97 points. After opening with an upside gap of 53 points (body gap, not a western gap), Nifty continued its upside momentum in the early-mid part of the session. The market was not able to sustain above the hurdle of 19800 levels and moved into a consolidation in the mid to later part of the session. The opening upside gap remains unfilled.
A small positive candle was formed on the daily chart with minor upper shadow. Technically, this pattern indicates an upside bounce in the market from near the immediate support of 10 day EMA around 19650 levels. But, the market seems to be facing resistance at 19800 levels.
The positive chart pattern like higher tops and bottoms continued on the daily chart and the low of Tuesday at 19615 levels could now be considered as a new higher bottom of the sequence. But, a decisive up move from here is likely to confirm this higher bottom reversal pattern.
Conclusion: Minor downward correction of the last few sessions seems to have completed and the market is now shifted into an upside bounce. A decisive move above 19850 is likely to open doors for higher target of 20050 in the near term. Immediate support is at 19600 levels.
