Index trend and stocks in action on August 13, 2020
As the saying goes, the amateurs control the open and professionals control the close. The same was displayed on D-Street on Wednesday.
Nifty opened lower in a knee-jerk reaction to fragile global cues. However, the professional bought the dip, and Nifty recovered from its lower levels to end the day with a minuscule loss of 14 points. Moreover, the close was near the day’s high.
The price action formed a small body bullish candle with a lower shadow. Despite opening with a negative bias, Nifty failed to close below the prior bar low. It did breach prior bar low at the opening bell itself but closed above 11,300 mark.
Now the key takeaway for the bear is that the index has formed a lower high after six consecutive higher highs and higher lows. However, apart from this, there is no significant take away for the bears.
Now going ahead, the immediate support for the index is placed at 11,230 levels and a move below this level could drag the index towards the level of 11,130, where the 20-DMA is placed. While on the upside, the zone of 11,340-11,380 is likely to act as a sturdy wall of resistance, and as long as Nifty trades below this zone, avoid aggressive buying.
Going ahead, the 20-DMA is likely to act as an important support in the near term, and on the upside, the bulls need to pierce the zone of 11,340-11,380 to extend its upmove.
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