Index trend and stocks in action October 07, 2019

It was a litmus test for the bulls on Friday as after flirting in and around its all-important support level of 200-DMA and bouncing off this support level in the last couple of sessions, the million dollar question was that will 200-DMA again lend its support to the index and rescue the bulls? At the start of the session, the bulls had a firm batting pitch to bat on as global cues were cheerful and the Nifty rallied towards 11,400 level, right at the opening bell. From that moment on, Nifty criss-crossed in a range as market participants were clearly waiting for the RBI policy outcome. Once the wise men of the monetary policy committee of RBI let the cat out of the bag, the key support level of 200-DMA was reduced to ashes as the outcome of the RBI policy was in parrot fashion and nothing out of the box, in fact, it turned out to be a recipe of disaster as the central bank sharply cut the GDP growth forecast for FY20 from 6.9 per cent to 6.1 per cent.  The Nifty ended near the lowest point of the day and witnessed a triple digit loss. As a result the price action formed a black closing Marubozu like candlestick pattern. Also, the Nifty has retraced over 50 per cent of two days big surge.

On a week-on-week basis, Nifty ended down by 2.93 per cent and it turned out to be the worst week for the markets since May 2019. Now going ahead, bulls will set sight on the next crucial support level of 11,074 as it is a 61.8 per cent retracement of the recent upsurge and also the 50-DMA is placed near this level. On the upside, the 200-DMA, which is placed at 11,262, would now act as a stiff resistance for the bulls. The daily relative strength index is in falling trajectory and features in the neutral zone, the next crucial level to watch out is around 38-40 mark.

While on hourly time frame RSI has entered into the oversold region and since the recent fall has extended for the fifth straight session, we would suggest readers to avoid aggressive shorting at current levels as these are some of mild signals which are hinting towards technical rebound. Despite the above minor factors, which are hinting towards a technical rebound, we would suggest readers to approach markets with cautiousness as barring Nifty FMCG and Auto, all the sectoral indices are trading below their 50-DMA, indicating broad-based weakness in the markets. Also, the FPIs have continued with the selling spree and Nifty added two distribution days during the week.  Overall, we expect the Nifty to trade in the region of 11,074-11,262. 

Yes Bank: Yes Bank has lodged a complaint with Mumbai Police and Cyber Cell against the dissemination of fake news and spread of rumors about the Bank's financial health on WhatsApp and other social media platforms.

PI Industries: Company has launched a new product under Herbicide segment to control pest of wheat crop.

HDFC Bank: Bank’s advances aggregated to approximately Rs. 8,970 billion as of September 30, 2019, a growth of around 19 per cent as compared to Rs. 7,508 billion as of September 30, 2018. The Bank’s deposits aggregated to approximately Rs. 10,215 billion as of September 30, 2019, a growth of around 22 per cent as compared to Rs. 8,334 billion as of September 30, 2018.

Au Small Finance Bank: Bank has entered into agreement with TATA AIG general insurance limited (TATA AIG) for General Insurance as Corporate Agent. This tie up shall be mutually beneficial for TATA AIG & AU Small Finance Bank in terms of business, market penetration and reach.

Glenmark Pharmaceuticals:  The USFDA has now issued a “Warning Letter” to the Baddi facility. The company is committed to work along with the USFDA to implement all the necessary corrective actions required to address the concerns raised in the letter and is in the process of preparing a detailed response to the USFDA within 15 working days.

Welspun Corp: The Company’s Plate and Coil Mill Division has received “Apex India OHS Excellence Award” from Apex India Foundation for its outstanding work in field of Occupation Health & Safety.

NFL: NFL has achieved 27 Lakh MT fertilizer sales during Kharif 2019 (April-September) which is 25 per cent higher than the previous year sale during this season.

HDFC: HDFC’s original cost of investment in RBL is Rs. 59 crore. As at June 30, 2019, the market value of the investment in RBL stood at Rs. 562 crore. As at April 1, 2018 at the time of transition of Ind AS a large part of the gain was adjusted in the transition reserve. Consequent to a drop in the share price of RBL during the quarter ended September 30, 2019, the market value of its investment at the quarter ended stood at Rs. 290 crore.

Info Edge: The Company has entered into an agreement to invest about Rs. 35 crore in Greytip software private limited.

SPARC: SPARC receives Orphan Drug Designation from the USFDA for Phenobarbital for the treatment of patients with Neonatal Seizures.

BEML: BEML has bagged further orders in Metro from M/s Delhi Metro Rail Corporation Limited (DMRC) for ‘R15’ - design, manufacture, supply, testing and commissioning of 80 nos. Broad Gauge Intermediate Cars compatible with existing ‘RS1’ type trains for conversion of 6-car train set to 8-car train set valuing Rs.729 crore approx.

NHPC: NHPC Limited has signed Definitive Agreement for implementation of the approved resolution Plan submitted by NHPC for takeover and resolution of Lance Teesta Hydro Power Limited (LTHPL), who was implementing the 500 MW (125 MW x 4) Teesta VI HEP on Teesta river in Sikkim.

BOSCH: The company at its various plants belonging to Powertrain Solutions division would continue to observe 'No Production Days' ranging upto 10 days per month per plant during the third quarter of the Financial Year 2019-2020.

Lupin: Lupin launches Mycophenolate Mofetil Capsules USP.

Ashok Leyland: The company's plants at various locations will be observing non-working days ranging from 2-15 days, during the month of October 2019.