Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The downside momentum continued in the market for the fourth consecutive sessions on Friday and Nifty closed the day lower by 68 points amidst volatility. After opening with a flat note, the market made an attempt to move up in the early part of the session. It later showed volatile intraday swing moves on either side and finally closed near the lows.
A reasonable negative candle was formed on the daily chart with upper shadow. Technically this market action indicates a sell on rise opportunity on Friday and this also signal a downtrend continuation pattern. The previous two opening down gaps remains unfilled after few sessions of its formation and these gaps could be considered as a bearish breakaway and bearish runaway gaps respectively. This could mean more weakness for the markets ahead.
Nifty on the weekly chart formed a long bear candle this week, which indicates a sharp reversal pattern on the downside. Normally, a formation of such long negative candles after a reasonable upmove signal chances of important top reversal pattern as per weekly chart. This week has registered a sharpest fall in one week -down by 2.5%, in the last 25-26 weeks.
The short term trend of Nifty continues to be weak. Having placed near the crucial lower supports, there is a possibility of minor upside bounce from near 19550 levels by next week. The anticipated upside bounce could be short lived and the market is expected to reverse down from the lower highs. Immediate resistance is around 19800-19850 levels.
