Nifty today: Short term trend positive, no indication of any reversal pattern at new highs

Nifty today: Indian benchmark equity indices ended flat today after making fresh record highs in early trade. NSE Nifty 50 opened mildly higher but kept sliding for the better part of the morning. Broader market indices like Midcap and Smallcap continued to outperform the Nifty and closed at their highest since April 2018/April 2019. At close, the Nifty was up 20 points or 0.15% at 13,134.
 
Volumes on the NSE were higher than recent average. Among sectors, Metals, Realty, Power, Auto, Pharma and Consumer Durables index gained the most while IT & Bank sectors came under profit taking.
 
Asian shares were mixed on Thursday after a choppy day of Wall Street trade, thanks in part to a disappointing U.S. jobs report. European shares opened lower on Thursday after gains spurred by advances in vaccines to fight COVID-19, but data across Europe underscored the economic damage still being caused by the pandemic. The IHS Markit Purchasing Managers' Index (PMI) for November in Spain shrank to 39.5 - below the 50 level separating growth from contraction. Italy's services contracted for a fourth month running, with the IHS Markit Business Activity Index for services dropping to 39.4.
 
India’s services PMI (seasonally adjusted) remained above 50 in November, coming in at 53.7 (October: 54.1). Phased unlocking of the economy, coupled with relative control of the virus outbreak, has given impetus to services activity.
 
Nifty, despite the minor slide from the record opening, closed just below the earlier record of 13146. The slow upward grind of the Nifty continues while individual stocks/sectors continue to do well.
 
After showing a fine upside recovery from the lows, Nifty witnessed a choppy trend near the new all time high of 13216 today and closed the day on a minor positive note. Nifty opened on a positive note, registered a new high on the opening and slipped into minor weakness soon after the opening. It later shifted into a narrow intraday range for the whole session and closed the day within a range movement. The opening upside gap remains partially filled.
 
A reasonable negative candle was formed at the new highs and the market is now placed at the edge of the support of previous swing highs of 13140-13130 levels as per the concept of change in polarity but failed to show any convincing upmove from the support. This action could be a cause of concern at the highs.
 
The highs of recent negative candle patterns like bearish engulfing (25th Nov-daily timeframe) and doji pattern (weekly timeframe) of last week has been violated at 13145 on Thursday as per intraday time frame, but the market was not able to sustain above the high of this pattern towards the end. This could mean a probability of further consolidation or higher level weakness in the coming sessions.
 
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The negative divergence pattern continued on the daily chart (higher high in the Nifty and lower high in the RSI) which could signal tiredness of the market at the new highs and the profit booking could emerge from near all time highs.
 
Conclusion: The short term trend of Nifty remains positive and there is no indication of any reversal pattern forming at the new highs. The market was seen struggling at the new highs, which could open further consolidation or weakness from the highs. Immediate supports to be watched at 13000 levels. On the upper side 13250 could act as a key overhead resistance.