Index trend and stocks in action October 18, 2019

The first couple hours of Thursday's session looked spiritless as market traded in a narrow range and as it is said stock markets have an uncanny ability to surprise. In the second half of trading session it was a complete surprise as bulls started to charge and just at the stroke of the penultimate hour the market got some pleasant updates with the respect to 'Brexit Deal' that resulted into a complete gush in the market, with the 50-share index Nifty closing near day's high. The price action resulted into a formation of a sizable bullish candle carrying higher high and higher low. Further, market breadth witnessed an improvement with advance-decline ratio tilting towards advances and this was the last nail in the bear's coffin.

If you recollect in our last column, we had clearly mentioned that a trending day is on the cards after a period of rest or a contraction. We hit a bull's eye on this. Thursday's price action indicates a sharp increase in momentum with one side (Bears) giving in and allowing index to surge higher because the friction of opposing positions have been removed from the system. After struggling to clear the 61.8 per cent retracement for the last two days, the bulls finally managed to cross this major roadblock along with improved market breadth and it also, cleared the 61.8 per cent retracement level of June 3rd to August 23rd, 2019 fall. With Thursday's surge, Nifty managed to close near the closing levels of 23rd September. Also, the 50-DMA turned upside, which is adding further confirmation of strength in the trend. The bears attempted to pull down the market many times during the week but failed miserably. There were many Doji formations during the week but the bulls dominated the market, registering higher high and closing higher than the previous day. On Thursday, October 17, the volumes were better than the previous trading session. Except Nifty IT, all the sectoral indices participated in the Thursday's sharp rally. The beaten-down stocks also gained a lot on a weekly expiry day. The RSI is also in upward channel. The MACD line is above the signal line and the histogram suggesting the bullish momentum. Now in the coming sessions, there are two major roadblocks for the index which are placed at 11,620 level which is a critical sloping trend line resistance followed by the prior pivot which is placed at 11,695 level. If these levels are cleared then the next target is placed at 11790. On the flipside, the 11,400 level is crucial support and until there are a couple of decisive closes that are below 11,400 level we would advise traders to adopt buying on dips strategy.

For now, we could effectively consider bears as extinct as we're only focusing on one direction until price tells us otherwise.

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LTI: LTI has signed a definitive agreement today after the Board of Directors of the Company at its meeting held today have approved acquisition of 100% shareholding of PowerupCloud Technologies Private Limited.

NOCIL: The Company has, after achieving mechanical completion, started the trial runs effective 17th October, 2019 at the Company’s plant situated at Dahej, in the state of Gujarat.

Indiabulls Housing Finance:  The Company issues an offer to all Debenture holder(s) for pre-mature redemption of its NCDs maturing in November and December 2019 at par. The Company will also evaluate further pre-mature redemption of its NCDs from time to time.

SEAMEC: Vessel "SEAMEC PRINCESS" has been put on hire with M/s. Posh Subsea Pte Limited. for working at Mumbai High Offshore with effect from 17th October, 2019.