Index trend and stocks in action October 23, 2019
The 50-share index Nifty has finally put a break on its upmove, which it enjoy over the last six consecutive trading sessions. It was Infosys, the IT major, which let the bear enter with a foot in the door, as the stock declined as much as 16 per cent – its worst single-day loss over the years. The price action for the day formed a bear candle; but what is important is that that Nifty has not breached its prior session low. Despite this, on Tuesday, the benchmark index added a distribution day, as sell-off came on higher volume.
In the early hour of trading session, Nifty had momentarily breached the Friday session’s high of 11,685; however, it failed to sustain above this mark. The index’s failure to move above the Friday’s high has led to a double top pattern formation. Just as the name implies, this price pattern involves the formation of two highs at almost identical levels. The September 23rd and October 22nd levels are almost identical and, since the market was rejected from this level not once but twice, it indicates that the level is likely to pose formidable resistance. However, we will not give much of an importance to double top pattern at this point of time, as the internal structure of the markets looks decent, with Bank Nifty surging around 1 per cent and advance-decline ratio being in favor of advancers.
Yesterday, Infosys caused much pressure on the index. However, if we do not cross the high of Tuesday’s session in the coming days and we see an increasing count of distribution day, we would start to lay emphasis on the double top pattern. The level of 11,475 is likely to act as an important support going forward. Sustaining above the level of 11,700 would open doors for an upmove towards levels of 11,780.
Overall, we expect the Nifty to consolidate with a corrective bias, unless the level of 11,700 is taken on convincingly.
Lupin: The company announced that it has received the U.S. FDA approval for Divalproex Sodium ER Tablets USP.
PEL: PEL's board of directors' meeting is scheduled to be held on October 25th, 2019, to consider the proposal for raising of funds up to an amount of Rs. 5,300 crores (approximately USD 750 Million) among other items.
Bajaj Finserv: Bajaj Life Insurance signed a corporate agreement with Axis Bank in the September quarter.
Linde India: CCI approved divestment of Linde India’s south region business. Air Water Inc. will purchase the surplus land at Chennai and Hyderabad and the decommissioned air separation unit at Hyderabad for Rs. 1,380 crores.
Subros: Production activities have started at Subros' new plant in Ahmedabad based on customer approvals. The production and supply of Automotive Air-Conditioning Systems and Engine Cooling Modules will be ramped up as per the demand from customers.
Jubilant LifeSciences: The company has received ANDA approval for Clomipramine Hydrochloride Capsules.