Index trend and stocks in action November 19, 2019

The Nifty 50 index kick-started the week on an optimistic note, thanks to positive cues from the global peers. However, very soon the markets were off the track and the benchmark index was searching for a clear direction for the rest of the day, ultimately closing with modest losses on Monday. The price action of the day formed a small negative body candle with a high low range of 78 points. We observed the formation of the NR4 bar as well. The NR4 bar is the narrowest range bar in the last 4 trading days and the 4th bar range is the narrowest of the previous three bars.

In the last couple of weeks, we have seen that prices have stayed subdued in narrow ranges. Moreover, with the formation of the NR4 bar, we believe that the red carpet is laid for the monster called ‘volatility’. Going ahead, the high and low of the Monday’s session would be watched by the traders as any sustainable move below Monday’s low of 11,867 would open gates for the immediate target of 11,800 mark and sustaining below the 11,800 mark would lead to levels of 11,670-11,700 in the short term. On the upside, sustaining above the 11,950 mark would open up for an immediate target of recent swing high of 12,034. 

Overall, there is no major change in the technical setup as compared to the previous trading session. The Nifty has headed nowhere and both the side is seen batting in the range, with none getting the upper hand. However, we believe that this period of range-bound trading will mature very soon and a trending move is likely to take place. The two key levels to watch out are 11,800 and 12,050; penetration with strength on either side would open gates for a trending move.