Index trend and stocks in action on September 03, 2020

The bulls might have extended their winning streak for the second consecutive day on Wednesday, aided by a rally in the metal, IT, and auto stocks but the bears didn’t let them enter into their territory as the wall of resistance of 11,550-11,560 stayed protected.

Nifty opened the session almost flat and soon after opening, it tried to gain momentum only to face resistance at higher levels. Thereafter, they seemed lost, and the bears pounced on this opportunity to take Nifty towards the intraday low of 11,430.40. Post that, there was not much dominance by the bears and in the last hour of the trade, it was a complete bull’s show as Nifty reclaimed the 11,500 mark.

The price action of the day formed a bullish candle but it was not of much prominence as for the majority of the day, it traded within the high-low range of the prior bar and further for the second day, Nifty was not able to cross the 50 per cent retracement level of the bearish bar formed on Monday.

Going ahead, the initial part of the session may be attention-grabbing as Nifty has closed right near to the border level of 11,550-11,560. If the bulls manage to pierce this borderline and sustain during the initial part of the trading session, the bears would be left with no other option other than ‘submission’. In that case, the bulls might try to reclaim 11,700 levels. On the other hand, if the bulls fail to get past this borderline (11,550-11,560), the bears might take bulls for a downhill ride. In that case, the level of 11,440-11,430 will become immediate support while the major support would be placed around 11,330 levels.

All-in-all, traders should keep an eye on the crucial levels of 11,550-11,560 and a failure to sustain above this level or rejection around this level could offer the best risk-reward short trade for the day traders. On sustaining above this zone, we would advise the traders to put on their bullish cap and stay long.

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