Index trend and stocks in action October 16, 2019
Three days of consecutive gains has helped the 50-share index Nifty to retrace 61.8 per cent of the recent fall that occurred from 23rd September to 9th October. On Tuesday, the index retook its 100-DMA and closed about 20 bps above it. The price action formed a bull candle carrying a higher-high and higher-low with the negative implication of the doji like candlestick formation seen in the prior session i.e. on Monday likely to be quashed as the index has managed to close above the high of doji bar. However, despite strong gains, the market breadth has remained narrow indicating that the strength of the bounce is not sufficient to move higher unless a huge buying interest comes in and a steady improvement in the market breadth is seen.
Going ahead, the opening of Nifty and its behavior around the immediate resistance level, which is placed at 11,463 in the form of 61.8 per cent retracement level, will be critical to watch in Wednesday's session. The first task for the bulls would be to cross the 61.8 per cent retracement (11,463) and sustain above this level to maintain its rhythm of higher-high:higher-low. Moreover, after forming a congestion zone between the 200-DMA and 100-DMA, Nifty has attempted a breakout. Hence, in the coming session, a follow through move above Tuesday's session high would give us a clear picture. If it sustains above Tuesday's session high it would pave the way towards our estimated target of 11,550-11,600 in the short term. However, a failure to move above decisively above Tuesday's high will push the index back into a consolidation phase, where the last week low of 11,090 is likely to act as a crucial support level. The leading indicator RSI has slightly inched up and its move above 60 could only mean further strength in the upside momentum. To conclude, we would say the bulls have the momentum, but market breadth is a concern as the breadth is yet to improve.
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ONGC: ONGC Videsh has recorded discoveries of oil in its onshore exploration block CPO-5, Colombia in the Llanos basin and major gas in the deep offshore exploration block BM-SEAL4, Brazil in the Sergipe Alagoas Basin.
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REC: Transfer of entire shareholding of REC Transmission Projects in WRSS XXI(A) Transco along with all its assets and liabilities to Adani Transmission.
ARSS Infrastructure Projects: Company has been awarded in favour of one Joint Venture (JV) named ‘ARSS-ROYAL(JV)’ by Rail Vikas Nigam Limited.