Index trend and stocks in action October 09, 2019
Jack and Jill, protagonists from one of the famous nursery rhymes, seem to come alive for what happened in the markets on Monday. The 50-share index Nifty went up the hill in the initial part of the session; however, it failed to capitalise on the initial gains and in the latter part of the session it came tumbling down to end the session near the day’s low. It fell more than 100 points from the day’s high and closed below the prior session’s low. The price action formed a bear candle with an upper shadow carrying lower high and lower low indicating continuation of a prevailing corrective phase. Currently, Nifty has closed below the short-term moving average of 20 DMA but just above the 50 DMA.
Interestingly, the Nifty retraced more than 50 per cent of the historical surge of 1,000 points. It fell 568 points from the high of 11,695 made on October 23. It also closed below the swing highs of August 9 and 27. Importantly, it tested the consolidation breakout level. At the same time, Nifty fell below this breakout level or the 11,140-181 zone and entered into a consolidation zone again. This means that the euphoria of the corporate tax cut has faded out. Now the big question is whether the 50 DMA level of 11,088 and 61.8 retracement of the recent upsurge at 11,061 will hold or not. In any case, if Nifty falls below the 11,060 level, the next level support is placed at 10,890. Below this, there are chances it may test the prior lows.
On the upside, the immediate resistance is placed at 200 DMA (11,264) and only by moving above this level will the bulls get confidence to move higher. Watch the zone of 11,060-11,264 for the next few days. The continuous negative closing days are now six on Nifty. As history suggests, most of the downswings ended on the 7th or 8th day. Let’s wait and watch whether history will be repeated or not. Meanwhile, the indicators are suggesting more weakness in the market in the near future. The leading indicator RSI once again reached below the 50 zone. The MACD line is about to cross under the signal line and the histogram is near zero.
TTK Prestige: The company has successfully concluded a long-term settlement covering all its workmen at the Hosur manufacturing unit. This settlement provides for significant increase in productivity.
HCL Technologies: The company announced the general availability of HCL Digital Experience (DX) 9.5, founded on the former IBM Web Sphere Portal and IBM Web Content Manager software, a recognised and proven digital experience management platform.
Minda Industries: The board, at its meeting held on October 7, has approved the acquisition of 100 per cent equity capital of the Delvis Group at a transaction value of Euro 21 million.
Mahindra Lifespaces: The company has launched its residential project, Vicino, at Andheri, Mumbai.
TCS: The company has been selected by Pandora, a world-leading jewellery design and manufacturer, based in Copenhagen, as a strategic lT partner.
Tata Motors: Jaguar Land Rover retail sales for the quarter ended September 30, 2019 were 1,28,953 vehicles, slightly down (-0.7) compared to the same period a year ago.
Aurobindo Pharmaceuticals: The company issued a clarification with respect to a news item. The USFDA conducted a cGMP inspection at the company’s Unit 7 manufacturing facility from September 19-27, 2019. The inspection ended with seven observations. The company believes none of the observations are related to data integrity. The company is confident of addressing these issues within the stipulated timeline.