Technical market quote by Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities

After showing an upside breakout of a smaller high low range recently, Nifty showed follow-through upmove amidst volatility on Tuesday and closed the day higher by 51 points. Nifty opened on a slightly weak note and witnessed an upside recovery from the lows in the early part of the session. Minor intraday weakness of mid-part has resulted in a buy on dips opportunity and a late session upmove was seen towards the end.

A reasonable positive candle was formed on a daily chart and the new high was formed at 16628 levels. Formation of lower shadow signal buy on dips opportunity in the market. This is a positive indication and it indicates an uptrend continuation pattern.

Presently, Nifty is showing a sustainable upmove with range bound action. On the weekly chart previous 7-8 weeks range movement has resulted in an upside breakout in the past (May-21) and similar market action has been observed recently (early part of Aug). Hence, there is a higher chance of further upside for the Nifty for the next 1 -2 weeks, before shifting into another broader high low range movement.

Conclusion: The short-term trend of Nifty continues to be positive. There is a possibility of further upside with range-bound action for the short term. The next upside levels to be watched are 16800-16900 levels in the next few sessions. Immediate support is placed at 16540 levels.