Index trend and stocks in action December 13, 2019

The up move, which Nifty started in the last hour of Wednesday’s trading session, continued for the major part of Thursday’s session as well and on the way up, the benchmark index crossed its 20-DMA on an intra-day basis. However, the price resisted near 50 per cent retracement level of the recent down move from its lifetime highs and in the eleventh hour of the trading session, the index came off from its high points and ended the day with gains of about half a per cent. The price action of the day formed a reasonable bull candle with an upper shadow.
 

Technically, the current up move in the Nifty has faced resistance near to 50 retracement level and closed above the 38.2 retracement level. Also, the index has faced resistance around 13-DMA and fell about 35 points from the day’s high. On Friday, 12,004 (13-DMA) will act as the critical resistance and Wednesday’s low 11,832 will act as short-term support. The two-day sharp bounce was unable to close above 20-DMA too. Despite the up move on December 4, the index was not able to cross the 50 per cent retracement. As we expected the last week, the RSI bounced from 46 levels, which is the historical support. The MACD histogram reduced its bearish momentum for the last two days but the major concern is its flat volumes. A sharper bounce without volume support may not sustain for a longer period. Let us wait and watch the volume improvement along with the follow-through days. Friday’s closing will give more clues for the short-term direction. Fresh momentum can be seen above the 12,004 levels and in that case, we can scale towards 12,100 levels.
 

On the whole, even though the Nifty is exhibiting buoyant undercurrent, it still has some critical overhead resistance to breach on the upside. Until then, we would suggest you do not chase the up move.