Nifty trend for Wednesday

December is known as the month of joy & happiness and living up to its expectation, the month began on a joyous note as the bull jumped over a per cent and hit record closing highs on Tuesday.

Meanwhile, Nifty started the session on a positive note and gradually moved higher. It finally closed above the 13,100 mark.

The price action of the day formed a small-bodied bullish candle that resembles a hanging man pattern. Nifty had formed a bearish engulfing pattern as of November 25. Thereafter, Nifty has failed to show any bearish implication. It is trading within the striking distance of the all-time high level of 13145, which also happens to be a high point of the bearish engulfing pattern. In the coming session, if the index moves above the 13,145 mark, it would be negating the bearish engulfing pattern of November 25 and at the same time, the Doji formation of the weekly chart would also be challenged.

So, moving above the 13,145 is crucial in the coming trading sessions and if Nifty does move above the 13,145, it would be like killing two birds with one stone. Sustaining above the level of 13,145 would open gates for the target of 13,220 and 13,400 in the near term.

On the lower timeframe, there is an interesting observation that Nifty is moving in an upward channel and the RSI is moving in a downward channel. Besides, the RSI would come out of the downward channel if it moves above the level of 73. 

Overall, the trend remains in the favour of the bulls and now, the key level to watch out for is the level of 13,145 as sustaining above this level would help to negate the bearish implication of the bearish engulfing pattern. Meanwhile, on the downside, the level of 12,900 is a crucial support level.