Index trend and stocks in action November 14, 2019

The Nifty opened on a flat note and traded in positive terrain for a brief spell before surrendering to the selling pressure, which resulted in the benchmark index closing near day’s low and below its prior session low. The Nifty Bank index had outperformed the Nifty, with gaining almost 3 per cent in the last four trading days. However, it snapped its four-day winning streak by ending sharply lower by 1.84 per cent. The price action on the daily timeframe of the Nifty has formed a sizable bearish candle, which closed below its crucial 8 EMA and below its trend line support. The Wednesday’s action qualifies for a distribution day as the index dropped over 0.20 on volume, which is more than previous session.

Just as we pointed out in our previous note, the Nifty is likely to trade in the range of 11,800-12,050, the index moved on expected lines. At present, it has reached near to its lower end of the trading range (11,800-12,034). Digging deeper on the lower timeframe, that is, the hourly timeframe, the index has formed a reversal pattern, known as the head and shoulders pattern. Hence, going forward, the level of 11,800 would hold the key as a sustainable move below this level the doors for correction would open up towards the zone of 11,670-11,700. According to the principle of polarity, 11,670-11,700 is a crucial area, which points out that once a resistance level is breached, it changes its nature and becomes support the next time it is approached.

The 14-period RSI on the daily timeframe has slipped below 60 mark. The daily MACD has shown a negative crossover; it is now bearish and trades below its signal line.

Overall, the bulls seem to be in the mood to give up after a series of failed attempts to cross the 12,050 level and the bears have put their foot in the door, resulting into signs of temporary top for the markets. However, the level of 11,800 holds the key and, close below 11,800 mark, the bears will smell blood.

Vedanta: Vedanta’s Aluminium & Power Business wins Jamkhani Coal Block. In terms of location, annual capacity, reserves, and readiness to produce, the Jamkhani coal block is one of the most attractive blocks for the company’s Jharsuguda plant.

Aurobindo Pharma: The United States Food and Drug Administration (US FDA) inspected the company's Unit IV, a general injectable formulation manufacturing facility, situated at Hyderabad, during the period of November 4-13, 2019. At the end of the inspection, the company has been issued a 'Form 483' with 14 observations.

Greaves Cotton: Greaves Cotton has acquired Ampere Vehicles Private Limited.

ITC: The company has entered into Share Subscription Agreement and Shareholders' Agreement to acquire up to 33.42 per cent of the share capital of Delectable Technologies Private Limited.