Index trend and stocks in action October 22, 2019
The third week of October showcased a stellar performance by the bulls, with the benchmark indices being closed positively in all five trading sessions in the last week. The bellwether index was boosted by buying interest, as some earnings surprised the market. The news about the UK and the European Union striking the long-awaited Brexit deal also influenced the index significantly. Traders were seen piling up ‘Brexit’ sensitive stocks as if there is no tomorrow. The interesting point to look at in this scenario is that FPIs were bought on all five days in the week. The Nifty advanced about 358 points or 3.17 per cent, in the last week. The broader markets performed in line with the market. Nifty Midcap and Smallcap surged 4.3 and 3.2 per cent, respectively.
Technically, with the five consecutive up days during the week, the weekly price action formed a sizable bull candle, carrying higher high-low, which clearly indicates an acceleration of upward momentum. On Friday, Nifty closed at 11,662 level after 61 days interval; the last time it had closed around these levels was back in the month of July. With the V-shaped recovery seen from the October 9th lows, Nifty has almost retraced 100 per cent of fall seen from September 23rd in just 8 trading days. Moreover, it has also broken out of the downward channel, formed from the June 3rd highs. Further, the index is trading above all key moving averages and the 50-DMA is in the rising mode, which augurs well for the markets.
Let’s dive deep into the indicators and volumes aspects and check whether they are in sync with the price or are diverging. Since September 24th onwards, the volumes are not encouraging enough and the distribution volumes are higher. Also, Nifty is moving higher with lower volumes and managing to protect the previous bar low in the recent run-up. Meanwhile, the leading indicator on the daily time scale has managed to enter the bullish territory, that is, above 60 mark; however, it has not marked a swing high. Although a swing high is witnessed on the weekly time scale but it trades in the neutral zone on this scale.
The MACD histogram has been increasing for the last three days. In the coming sessions, it would be interesting to see whether the bull manages to cross the last week high of 11,696 and if it can protect the previous bar low. A sustainable move above 11,696 mark will result in an extension of the upmove towards the levels of 11,790-11,830 mark. For now, the failure to pierce above the last week’s high and close below the prior low will be the first sign of profit booking.
Finally, we will conclude with why argue against what the markets are telling through price action. The bulls are in control, but we would advise to not get complacent, as the coming week would be driven by earnings and global sentiments.
Wipro: Topcoder, a Wipro Company, and the world's largest technology network and on-demand digital talent platform, announced the addition of new data science and Al features to the Topcoder Platform.
CreditAccess Garmeen: CreditAccess Grameen, India’s leading NBFC-MFI has expanded its footprint in five new states - Gujarat, Rajasthan, Uttar Pradesh, Bihar and Jharkhand, during June to September 2019.
Jubliant LifeSciences: Partial Early Redemption of 4.875% Senior Notes Due 2021 by Jubilant Pharma Limited, wholly-owned subsidiary of the Company (a company incorporated under the laws of Singapore).
Granules: Granules received US FDA approval for Fexofenadine Hydrochloride Tablets.
Sadbhav Infrastructure Project: The board of directors of Sadbhav Engineering (SEL) and Sadbhav Infrastructure Project (SIPL) have approved the merger of Sadbhav Infrastructure into Sadbhav Engineering, according to their exchange filings. Sadbhav Infrastructure is the subsidiary of Sadbhav Engineering.
Tata Motors: The Board of Directors of the company is scheduled to meet on 25th October 2019 to consider raising funds by way of issue of one or more instruments.
Infosys: The Company has received anonymous whistleblower complaints alleging certain unethical practices. These have been placed before the Audit Committee as per the Company's practice and will be dealt with in accordance with the Company's whistleblower policy.