Index trend and stocks in action January 01, 2020

On the last day of the year (and the decade as well), Nifty ended on a bearish note. It opened lower but losses were restricted until late afternoon trade. However, in the last leg of trade, the selling pressure got intense and aggravated, which led the index to settle with losses of 0.71 per cent.

The price action of the day formed a sizable bear candle, which confirmed the prior day's bearish candle. It also added a distribution day. Further, if we observe the last price action of the previous three trading sessions, there has been a formation of a bearish Evening Star-like candlestick pattern and it is not a perfect text book pattern. Even on the weekly chart, after a Doji bar, it is forming a bearish Engulfing candle-like pattern.

As the last week’s low is very near - just about another 50 points away - it better to be cautious on the long positions. The Doji candle on a monthly chart is another sign of tiredness of the bulls and indecisiveness in the market. At this juncture, Nifty closing below the last week’s low of 12,119 will mean a reasonable correction is offing. The market mean average or the magnet of the market, 20DMA, is also placed at 12,100. Hence, the level of 12,100 is one key level to be watched in the coming days. For the medium term, the recent base around 11,850 levels is strongest support for now. On the upside, the 12,300 level is likely to act as a strong resistance for the medium term.

On the Nifty daily chart, prices have been making higher highs and at the same time, the +DMI, green line, indicates the direction of the trend-making lower highs. This indicates upside momentum is weakened, as evident by the divergence in higher highs on prices and corresponding lower highs on +DMI. Meanwhile, ADX is also diverging from higher highs in price, as it is making lower highs. The MACD has shown a negative crossover; it is now bearish and trades below its signal line.

We recommended readers to be caution and avoid aggressive buying. Wait for fresh buying opportunity at lower levels near the crucial support levels.

RITES: The company has received a reaffirmed rating of IVR A1+ (IVR A One Plus) for short-term non fund-based facility up to an amount of Rs 850 crores from Infomerics Valuation and Rating Pvt. Ltd.

CreditAccess Grameen: CreditAccess Grameen has completed direct assignment transaction of Rs. 434.99 crore on December 31, 2019, which is also the total amount drawn during this quarter in the form of direct assignment. With this transaction, the company has completed one securitization and four direct assignment transactions and have drawn a total of Rs. 816.69 crore in FY20.

Adani Green Energy: Adani Renewable Energy, a step down subsidiary of Adani Green Energy, has commissioned its 75 MW Wind Power Project, having Power Purchase Agreement with Maharashtra State Electricity Distribution Company at Rs 2.85/kWh for a period of 25 years.

Premier Explosives: The company has received a Rate Contract for the supply of bulk loading explosives from Jaiprakash Power Ventures Limited. The contract is for a period of one year from January 01, 2020, with an expected value of Rs 15.44 crore and the supplies would be made at the Singrauli plant.

Sterling and Wilson Solar: Promoters have enabled repayment of Rs 1,000 crore from the listing date till December 31, 2019. The balance loan amount of Rs 1,644 crore will be paid over the next three quarters.

PTC: The company won the bid as an aggregator for Pilot Scheme - II issued by the Ministry of Power for the resolution of stressed thermal assets.