Index trend and stocks in action on August 04, 2020
Nifty extended its fall for the fourth straight day on Monday, the most in over five months.
Nifty opened the session on a weak note and it remained under pressure throughout the day and ended near the day’s low.
Nifty closed below the critical support of 11,058 and formed a bearish belt hold. It also closed below the 20-EMA, which was holding as a support for the last two months. It took support for several times at 20-EMA. After closing below the rising wedge pattern, Nifty fell sharply and reached almost 200-DMA support at 10,858. Let us hope this support may hold for at least on Tuesday.
Even after trading above the 200-DMA for the last 12 trading sessions, the long-term moving average did not trend up because Nifty moved sideways.
Going ahead, in any case, if Nifty manages to close below the 200-DMA, the next level of meaningful support would be placed at 10,550. Interestingly, the 61.8 per cent retracement of the current upswing is also at 10,860. This confluence may work as strong support.
All eyes will be on the level of 10,860 and a breach of this level would open gates for some serious downfall.
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