Index trend and stocks in action December 10, 2019

The Nifty opened the session on a flat note; however, soon it slipped into a minor intraday weakness. Nonetheless, it took support around the prior bar low and, thereafter, it showed an intraday upside bounce in the mid-session but it found resistance right at the 20-DMA and ended the session near the opening of the session. The price action of the day led to the formation of a ‘Doji’ like candle pattern, which is placed beside the wide-ranging bar, formed on Friday.
 
The takeaway from Monday’s session is that, after the formation of the wide-ranging bar on Friday, we saw the volatility stabilizing in Monday’s session. Also, the bulls defended the prior bar low of 11,888 and the bears kept the up move of the Nifty in check, as the index resisted at 20-DMA. Going ahead, the identical low (11,888) of the previous two trading sessions is likely to act as an immediate support level and on the upside. The 20-DMA, which is placed at 11,981, is likely to act as an immediate resistance level. Hence, in the coming trading session, two levels, which are key levels for traders to watch out, are the level of 11,888 on the downside and the 11,981 level on the upside. A break on either side of this range would result in a trending move.

The daily RSI is hovering around 51-52 mark, the next important level on RSI is 47, as it is a swing low registered on October 07, 2019. Historically, the zone of 40-45 has proven to be a good support. We need to wait and watch this time that whether it takes support around these levels or will it go down to oversold conditions.