HDFC Securities view on Nifty performance today II All you need to know

Indian equity benchmark indices ended the first day of the week with gains, even as banking stocks underperformed in a volatile session. At close the NSE Nifty 50 index ended 0.52% higher at 12,926.
 
Volumes on the NSE remained high compared to recent averages. IT, Pharma, Metals and Realty indices were the main gainers while Banks were the main losers even though some Banks rose following the recommendations of the RBI working group on allowing changes in ownership of Banks. 
 
Global stocks advanced as AstraZeneca Plc said an interim analysis of clinical trials showed its coronavirus vaccine has an average efficacy of 70% in protecting against the virus. Vaccine announcements have added to the risk-on mood in markets as investors looked forward to the end of the pandemic. Investors’ also got excited after a top official of the U.S. government’s vaccine development effort said Sunday that the first vaccines could be given to U.S. healthcare workers and others recommended by mid-December.
 
IHS Markit's flash purchasing managers index (PMI) index for the euro zone, which looks at activity in both manufacturing and services sectors, came in at 45.1 in November, which is the lowest reading in six months.
 
The US dollar dropped to low levels last seen in 2018 as fast-tracked plans to roll out a coronavirus vaccine in the U.S. supported the market mood for risk assets. The dollar has fallen more than 11% from its record high in March. This helps prices of commodities and emerging equities.
 
Nifty seems to be inching towards the 13200-13300 mark over the next few sessions as the street continues to get excited by vaccine news. Repeated intraday recovery from the lows comforts the traders and investors.
 
Range bound movement with positive bias continued in the market on Monday and Nifty closed the day with modest gains of 67 points. After opening on a positive note, the Nifty slipped into intraday weakness and filled the opening upside gap completely in the early part of the session. It later shifted into a gradual upside bounce and registered a new all time high of 12968 in the afternoon to later part of the session and closed near the highs.
 
A small body of negative candle was formed with lower shadow; technically, this pattern could mean a buy on intraday dips action in the market. The Nifty remained in a narrow range of 12970-12730 levels over the last few sessions. As long as it stays in a range, that could create a cushion for a sharp upside breakout of the hurdle of 13000 levels.
 
HDFC Securities observes a positive sequence of higher highs and lows on the daily timeframe chart and the daily 14 period RSI is hovering around 70 levels. Though Nifty is registering new all time highs day by day, still there is no indication of any significant reversal pattern at the highs and the buying is consistently emerging from the lows, during small corrections.
 
See Zee Business Live TV Streaming Below:

Nifty on the weekly chart sustained above the key overhead resistance of 12800 levels for the second week (up trend line, connected top to top-weekly/monthly time frame). This is a positive indication and one may expect further upside in the near term.
 
Conclusion: The short term trend of Nifty is range bound with positive bias. A sustainable move above 13000 levels is expected to bring sharp upside momentum back into action, which could later pull Nifty towards 13500-13600 levels in the near term. Inability to show an upside breakout of 13K mark could result in further consolidation or minor weakness from the highs. Immediate support is placed at 12800-12750.