Index trend and stocks in action November 05, 2019
The 50-share NSE index, Nifty, started trading for the week on a positive note and, as the day progressed, it was racing towards the magical mark of 12,000. However, after registering a high of 11,989, the index came off rapidly from the day’s high and the level of 12,000 looked so near and yet so far. Eventually, at the closing bell, Nifty closed at 11,941 mark. The price action of the day resulted into a formation of ‘Shooting Star’ like pattern.
The index has continued its upward trajectory for the seventh straight sessions; however, it has formed four consecutive 'not so bullish' candlestick patterns in the last four trading sessions. These back-to-back formations of 'not so bullish' candlestick pattern indicate a tiredness in the rally. Further, as the history suggested, most of the upswings ended on the 7th or 8th day. Let us wait and watch if the history repeat itself.
In the coming session, the opening of markets and, trajectory thereafter, would be important. Immediate support for the Nifty is placed at 11,880, followed by 11,840 levels. On the upside, the level of 11,980, followed by 12,040, would act as immediate resistance points.
The leading indicator, RSI, marked a fresh 14-period high on the daily time scale; it has now entered into overbought territory. Moreover, stochastic oscillator is suggesting overbought condition. The 'not so convincing bullish' candles and overbought condition is indicating that probable profits may come in the future sessions.
All in all, we would recommend traders not to be aggressive in initiating long position on index at this moment, unless we witness a convincing breakout of 12,000 mark. The advice for traders, who are already long, would be to maintain a strict trailing stop loss around 11,840 mark.
Mahindra & Mahindra: The company offered a pro-active inspection and replacement of suspension component on a limited batch of XUV300 vehicles, manufactured till May 19.
SMS LifeSciences: The company is confident of manufacturing Ranitidine HCL well within the limits as mentioned in the said press release, issued by the USFDA, that is, lower than 0.096 micrograms or 0.32 parts per million (ppm).
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