Index trend and stocks in action on August 18, 2020

After a sharp fall on Friday, the bulls were in for a pleasant surprise as Nifty opened the session with a gap-up. However, it turned out to be a mere formality since soon after opening higher, the index trimmed its opening gains. Thereafter, for the majority part of the day, Nifty traded within the first-hour range. In the end, Nifty gained 0.61 per cent at 11,247.

As the price closed near the opening level, it led to a formation of Dragonfly Doji candle, and also, as the price traded within the high low range of prior bar, it led to a formation of an inside bar. As mentioned about the sheet anchor role played by 21-EMA, yet again, it has acted as a saviour. Hence, going ahead, all eyes will be on the 21-EMA, which is currently placed at 11,111 and also coincides with Friday’s low.

A decisive move below this level would certainly tilt the weight in the favour of bears and we could slide down towards the levels of 11,040 and below. However, as long as the index is sustaining above the 21-EMA, no shorting would not be advised.

On the upside, the zone of 11,255-11,265 is likely to act as an immediate resistance zone. A sustainable move above this level could take the index towards levels of 11,340-11,380.

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