Underlying trend of Nifty continues to be up :: HDFC Securities

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Observation:
 After a sharp upmove of last session, Nifty shifted into sideways consolidation today and formed a
breather type pattern.
 After opening with upside gap of around 24 points today, Nifty moved up immediately and formed yet
another all time high of around 8741 levels. It later slipped into intraday declines and filled the opening
upside gap completely.
 We observe five opening upside gaps consistently in the last five sessions. Today’s opening upside gap,
which is the first one to get filled completely and remaining are unfilled or partially filled.
 The sentiment was not good today as we have witnessed more declining issues than advancing issues
(adv-594, dec-881), which is not a good sign for bulls to move up further.
 The high wave or stalled type candle patter has been formed today. After a sharp upmove, the
formations of such patterns are considered as a breather pattern or up trend continuation patterns. If the
underlying declines by next session below the support area of 8640-30 levels, then the immediate three
candles could form top reversal pattern for Nifty.
 Nifty is now approaching the key overhead hurdles of upper area of upward sloping channel line (green
parallel up trend lines), which is now placed around 8830-50 levels for the next couple of sessions.

Conclusion & Strategy:

 The underlying trend of Nifty continues to be up, but the inherent strength has started to weaken as the

Nifty approaching the overhead hurdles of around 8760, 8830 levels.

 The current upmove has a possibility to extend up to the overhead resistances, but one has to be careful

about long positions, as there is a probability of top formations in the next couple of sessions. Hence,

immediate support is placed around 8640-30 levels.

LINK

http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010867