Nifty trend and stocks in action on September 18, 2020

Nifty gave away almost all the gains of Wednesday as it ended the session with a loss of 88 points at 11,516. The price action of the day formed a small body bearish candle with a long upper shadow.

In line with the global cues, the index opened lower. However, it attempted to recover after the initial bump and fill its opening downside gap but it resisted around the high of September 3, and thereafter, closed near the day’s low.

With a down close of Thursday, it seems the bulls have been trapped and the breakout, which was witnessed on Wednesday turned to be a false breakout. Going ahead, it’s important to see whether Thursday's bearish move gets a follow-through day, or it just a trap as follow-through day has been missing recently on either side. So, Friday’s session would give a clear idea as to where the markets are headed in the near term.

Now, the important support for the index is placed at 11,460 level as the 20-DMA is placed around this region, followed by the major support placed at 11,300. After closing below the previous day's low, in any case, if Nifty closes below the 20-DMA, it would see bears again in the driving seat. The technical patterns are failing frequently in recent days; let us wait for the confirmation of a decisive trending move.

Traders are advised to follow strict money management rules and trade with less quantity in the index until we get confirmation of a trending move.

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