Index trend and stocks in action December 11, 2019

After taking a breather in the previous trading sessions, the bears were back in town, as the 50-share index, Nifty, ended the session with heavy losses. The benchmark index lost 0.68 per cent over the day to close at 11,857 levels. It closed at its one-month low and also closed below the identical bottom of previous two trading sessions. The price action formed a sizable bear candle, carrying a lower high and lower low.

Going ahead, now the Nifty is in a stage where the odds of testing the lower end of the consolidation range at 11,800 are very likely. Also, as things stand the current structure of the markets, nothing supports buying on dips strategy as well. However, if 11,800 mark does not hold, it may slide towards level of 11,749 level, where the 50-DMA is placed. The 100-DMA has slipped below the 200-DMA, which also indicates that there is a loss of short-term momentum. On the higher side, an immediate resistance is seen around 11,900 mark, followed by 11,980.

The RSI on the daily chart has marked a fresh 14-period low. 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. The daily MACD stays bearish and trades below its signal line.

All-in-all, the Nifty may test lower end of the consolidation range. The breach of this range would result into testing of 50-DMA.


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