Mr. Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities
After witnessing a sharp upmove in the last few sessions, Nifty shifted into a consolidation with range bound action on Thursday and closed the day lower by 36 points. Nifty opened with a flat to negative note and slipped into weakness soon after the opening. It later shifted into an upside recovery with range bound action for better part of the session.
A small negative candle was formed on the daily chart with minor lower shadow. Technically, this pattern indicates a breather pattern for the market post sharp upmoves. After moving up sharply, the market not willing to show any significant reversal on the downside itself is a positive indication for the market ahead. Such market actions more often seen during strong trended upmoves.
The huge opening upside gap of 4th Dec (20507-20291) is still open, four sessions after its formation. Normally, such unfilled opening gaps during upmoves are considered as bullish breakaway gaps, which signals that market is in the middle of sharp uptrend.
The near-term uptrend status of the Nifty remains intact. There is a possibility of some more consolidation or minor weakness in the next 1 or 2 sessions before resuming decisive upmove again. Immediate resistance is placed at 20950 levels and an upside breakout could open the next upside target of 21550 (78.6% Fibonacci extension). Immediate support is at 20830 levels.
