Index trend and stocks in action November 28, 2019

On Wednesday, the Nifty opened the session on a positive note and, thereafter, it traded in a capped range with bouts of volatility. A renewed buying interest was seen towards the end of the session that helped the index to close above the 12,100 mark for the first time. The price action formed a bullish candle, carrying a lower high and higher low as compare to the previous bar and this formation are known as an inside bar since the price remained within the high to low range of the prior. Further, the daily range of the Nifty from high to low was of about 60 points and this was the narrowest range out of the last 4 bars. Hence, it was an Inside Day NR4 (ID/NR4) pattern and Toby Crabel identified that this pattern is an objective criterion for determining the day of decreased range and volatility. Once an ID/NR4 is found, we trade the breakout as volatility resumes. The formation of this pattern just ahead of the current derivative series is a clear sign that we are likely to see a volatility expansion phase on the expiry day.
 
Technically, the Nifty is currently placed at a crucial juncture or a hurdle of 12,103-12,133 levels and a sustainable move above this zone could lead the index towards our short term target of 12,240-12,300. In case of any setbacks, immediate support is seen on the downside in the zone of 12,000-12,040. However, the level of 12,000 is very crucial for the Nifty and slipping below this level could mean the index may once again enter into a consolidation and correction phase. Meanwhile, we have observed that negative divergence on the lead indicator persists. But, the formation of negative divergence itself is not a reversal signal.

All-in-all, the Nifty is all set for an eventful expiry and Thursday session would be a crucial one in several ways as markets are likely to decide its trajectory for the coming days. If the Nifty moves past 12,133 mark and sustains above this level, we might see the bearish divergence getting resolved. However, if there is no breakout on Thursday, then there are possibilities double top pattern resistance will be at the forefront.

Balaji Amines: Balaji Amines is setting up Organic and Specialty Chemicals Manufacturing Unit of capacity 874.2 TPD (tons per day) in Maharashtra. The company has also received the environmental clearance for the same from the Government for the aforementioned unit.

Cipla: Cipla’s arm, Cipla (EU), has increased its stake in its Sri Lanka arm from 60 per cent to 100 per cent.

RBL Bank: A meeting of Board of Directors is to be held on November 30 to consider fund raising via issue of equity shares on a Preferential basis.

Jet Airways: The Committee of creditors decided to further file for extension of the resolution process by another 90 days.

Manappuram Finance: Manappuram Finance is mulling to undertake the issue of foreign currency denominated bonds under MTN program on December 3 or later.

Indian Overseas Bank: The Reserve Bank of India has levied penalty of Rs3.3 lakh on Indian Overseas Bank under the FEMA Act 1999.