Index trend and stocks in action on June 09, 2020
What a pleasant start to the week! Nifty witnessed a gap-up opening and it almost filled the gap of May 13, 2020. After a gap-up opening, it moved sideways but thereafter, reversed its opening gains and closed almost flat.
Since the index opened near the highest point of the day, it fell nearly 150 points from the day’s high and formed a bearish belt hold like pattern. Further, Nifty tested its falling 100-DMA but failed to close above it and incidentally, faced resistance at the upper channel. Technically, Nifty formed a sizable bearish bar after a series of indecisive bars indicating that the index is in profit booking mode and aggressive profit booking was witnessed at higher levels.
Nifty took support around its 20-hourly moving average (10,126) and in the coming trading session, this moving average is likely to act as an immediate support level. While on the upside, the level of 10,240 would act as a stiff resistance level.
There is a negative divergence in RSI on the hourly chart. Even though the price is moving up, RSI is moving in a downward channel on the hourly chart.
Going ahead, the level of 10,126 is likely to act as a crucial support level for the index and in any case, this level is breached and Nifty may drift lower towards the level of 10,000.
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