Nifty trend and stocks in action on September 09, 2020

Tuesday’s session turned out to be a tiring as well as a terrible one for Nifty. Tiring because after an initial optimism, Nifty managed to creep higher but the momentum was clearly amiss and terrible because Nifty lost almost 120 points from the day’s high and ended with a net loss of 0.33 per cent.

Nifty faced reversal exactly from the region which we mentioned in that previous article and ended the day just above the 11,300 mark. Nifty breadth was negative as 37 stocks ended in the red while 13 ended in the green.

The price action of the day formed a bear candle with an upper shadow indicating selling pressure at higher levels. So, officially on Tuesday, Nifty hit a hat-trick for closing below the 21-day EMA and this is a record, which the bulls definitely would not be proud of. Furthermore, the 21-day EMA has started to change its trajectory, which adds to the chorus of things that are against the bulls.

If we move to a lower timeframe i.e. the hourly timeframe, the bars which give us the real sense of the market behaviour throughout the day, there was only a single bullish bar and the rest were either indecisive or bearish. Thus, the price action also suggests that the bears had an upper hand. Now going ahead, the final ray of hope of support for the index is placed at 11,250 mark and a breach of this region would mean that the gates for a further correction towards 11,110-11,070 levels have opened.

On the upside, the level of 11,370-11,450 zone would continue to act as a strong resistance zone and unless Nifty closes above this zone, the bears would have an upper hand and all rallies will be used by the traders to offload their positions.

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