Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The sharp upside momentum continued in the market on Tuesday and Nifty closed the day with another handsome gain of 168 points. After opening with an upside gap of 122 points, the market slipped into minor intraday weakness soon after the opening. The early mid-part dip in the market has turned out to be a buy on dips opportunity in the afternoon. New all-time high was registered at 20864 and Nifty closed near the highs. The opening upside gap has been left partially filled.
A reasonable positive candle was formed on the daily chart with long lower shadow. Technically, this pattern reflects ongoing sharp upside in the market and buy on intraday dips opportunity. The huge opening upside gap of Monday and another opening upside gap of Tuesday remains open. As per the gap theory, the recent opening upside gaps could be considered as a bullish runaway gap and this indicates that Nifty is in a middle of a sharp uptrend.
The underlying trend of Nifty is sharply positive. A decisive move above the immediate resistance of 20910 levels (61.8% Fibonacci projection), the Nifty is expected to reach towards the next upside target of 21550 (78.6% Fib. projection, taken from the bottom of March 23 to top of Sept 23 and to bottom of Oct 23 - As per weekly chart). Immediate support is placed at 20710.
