The market seems to have started tiring at the new highs of 16700

In this article, Mr. Nagaraj Shetti, Technical Research Analyst, HDFC Securities presents his technical quote on today’s market performance.

After showing sustainable upmove in the last few sessions, Nifty witnessed profit booking from the new highs of 16701 levels on Wednesday and closed the day lower by 45 points. After opening on an upside gap of 77 points, Nifty made an attempt to move up in the early part of the session. Sharp intraday profit booking has witnessed from a day's high of 16700 levels and the market showed downward correction amidst a range movement in the mid part to later part of the session to close near the lows. The opening upside gap has been filled completely.

A long negative candle was formed on the daily chart after opening higher, which indicates a formation of a bearish counter attack type candle pattern. This market action suggests further consolidation or minor downward correction ahead.

Previously, we observe downward correction up to 2-3 sessions during broader range movement and recently the consolidation with narrow range movement. The underlying uptrend of Nifty as per smaller and larger timeframe is intact and Wednesday's pattern is not showing any alarming signal with regards to a top reversal pattern. However, there is a possibility of further consolidation or minor weakness within a range in the short term.

Conclusion: The market seems to have started tiring at the new highs of 16700. But, there is no indication of any reversal pattern unfolding at the higher levels. Any decline from here down to the support of 16400 (20 day EMA on a daily chart) could be a buy on dips opportunity in the near term. We expect an upside bounce from the lows in the coming sessions.  The upside target for Nifty remains at 16900 levels.