Index trend and stocks in action November 04, 2019

The week that concluded was a good one for investors and traders as the Nifty inched higher by 2.27 per cent week-on-week (w-o-w) basis. Moreover, the benchmark index was up in every trading session in the week. In the broader markets, the Nifty Midcap index outperformed the Nifty as it surged 3.74, while the Nifty Smallcap index kept pace with it and advanced 2.20 per cent.
 
On Friday, the Nifty traded in a tight range throughout the day and closed shy of 11,900 mark by just a small gap. The range of the day, that is high to low, was roughly around 75 points and probably the lowest amongst the last four trading sessions. Hence, it qualifies for an NR4 day. An NR4 is a bar with the narrowest range among the last four bars. A regular contraction phase in the market is identified through some patterns, one of which is NR4. Also, on Friday the Nifty index has formed an indecisive candlestick pattern, that is, a Doji pattern. There are back to back Doji formation on the daily charts in the last two trading sessions, indicating a pause in the momentum. If we sum-up the above price action details, we get signs of bulls exhaustion, which is a routine phenomenon of the market after a V-shaped recovery. However, on the weekly time frame, the weekly price-action formed a strong bull candle with a higher high and a higher low, indicating that the broad positive trend is intact.
 
Going ahead, Friday’s session low of 11,843 would act as immediate support and the failure to hold this support would attract further profit booking. In that case, the Nifty may pullback towards levels of 11,700-11,720. This area would gain a lot of interest from traders as this zone has acted as stiff resistance for the index and, as per the rule and the concept of polarity, the resistance level will become the support level, once it is breached. In the short term, 11,700-11,720 is a very crucial support level for the index. On the flip side, a follow-through strength above the prior week high of 11,945 would lead to an acceleration of upward momentum towards the level of 12,103 in the short term.
 
To conclude, traders should keep an eye on two important levels, that is, 11,945 on the upside and 11,843 on the downside. More or less, this would be the range for the first trading session of the week, unless some catastrophic event breaks out. Further, a breakout in either direction will result in a directional move in the index. Traders can look out for a stock-specific approach unless we see a breach of the above-mentioned range on the index.

Edelweiss Financial Services: The NBFC arm of Edelweiss Group, ECL Finance, announces Rs. 500 crores Public Issue of Secured Redeemable Non-Convertible Debentures (NCDs).

Reliance Capital: Reliance Capital has defaulted in payment of NCD obligations, which was due on Oct. 31. Further, the interest/principal obligations, due on Nov. 2, have also been delayed.

Coal India: Coal India's coal production in October, 2019, was down by 20.9% at 39.35 million tonnes from 49.78 million tonnes produced in the same month the last year. Coal offtake declined by 18.9% at 40.5 million tonnes from last year's 49.96 million tonnes.

Ashok Leyland: The company has proposed to observe a few non-working days, ranging from 1 to 12, during the month of November, 2019, in order to align the manufacturing in accordance with the market demand for their products.

Alkem Laboratories: The USFDA issues establishment inspection report (EIR) for Alkem Laboratories manufacturing facility, located at Daman and Baddi.

Vodafone Idea: CRISIL downgraded its rating on non-convertible debentures of Rs. 3,500 crores of Vodafone Mobile Services from CRISIL A to CRISIL BBB+.

InterGlobe Aviation: InterGlobe Aviation said that they are confident to meet DGCA directive, where the company is required to have at least one LPT 3 modified engine on aircrafts with just one unmodified engine.

Seamec: The company has informed that the subject contract for the second season has commenced from October 31, 2019, with the mobilisation of Barge Glorious.