Immediate Nifty support now at 12980 says HDFC Securities

Indian Benchmark equity indices recovered from the day's low point post 2 pm and ended with little change in a mildly volatile session today. NSE Nifty closed flat - up by 5 points at 13114.
 
Volumes on the NSE were higher than recent average. Among sectors, Metals, Auto and Realty indices were the main gainers while Bank index was the main loser.
 
Asian shares were mixed Wednesday as hopes for additional U.S. economic stimulus and a coronavirus vaccine, were offset by profit taking by some investors. Australia reported its economy expanded 3.3% in the July-September quarter as the country recovered from pandemic lockdowns. That lifted the country out of recession, although in annual terms the economy contracted 3.8% from a year earlier.
 
European stocks pulled back slightly on Wednesday morning, tracking mixed sentiment in their U.S. and Asia-Pacific counterparts. The U.K. on Wednesday became the first country in the world to authorize the Pfizer-BioNTech coronavirus vaccine, making it available from next week.
 
Nifty refuses to settle lower and keeps recovering from intraday losses. At the same time it is becoming difficult for it to rise sharply from hereon. Nifty is not far from the recent high of 13146. Sector and stock rotation could continue till a major trigger takes it either way. 
 
Nifty continued its upside momentum amidst a volatility on Wednesday and closed the day on a flat note. After opening on a slightly positive note, Nifty slipped into weakness in the early to mid part of the session. A sharp upside recovery has emerged from an intraday low in the afternoon to later part of the session and Nifty finally closed near the upper end of a range.
 
A small negative candle was formed on Wednesday with lower shadow, which signals a formation of hanging man type candle pattern. Normally, a formation of hanging men after a reasonable upmove is considered as a warning signal for reversal of trend post confirmation. But, having formed this pattern amidst a range movement, the immediate negative implication could be doubtful.
 
The negative pattern of bearish engulfing of daily time frame chart (25th Nov) and doji pattern of last week is still intact as long as the new high of 13150 is protected. A decisive/sustainable move above 13150 is expected to negate both the negative pattern and that could turn sentiment into further bullish.
 
height="315" src="https://www.zeebiz.com/hindi/live-tv/embed" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen> The display of instability around 13150-13200 levels could mean an emergence of selling pressure at the highs and one big drop in the index can't be ruled out from the new highs. One needs to be cautious at the highs.
 
Conclusion: The short term trend of Nifty continues to be positive with range bound action. The market is expected to face stiff resistance around 13150 or slight higher in the coming sessions. A sustainable move above this area could open some more upside for the market. A lack of strength to sustain around 13150 levels is expected to result in another one day sharp drop in the index from the highs. Immediate support is now at 12980 on Nifty.