Index trend and stocks in action October 31, 2019

Nifty took over the positive baton from the last trading sessions and opened with a monstrous triple-digit gap. However, the bulls failed to capitalize on the strong start since the profit booking surfaced near the resistance level, as mentioned in our previous note. At one point, the bulls gave up nearly all its gains. However, Nifty saw a recovery in the second half of the session and managed to close the day with a 0.5 per cent gain at 11,844 levels. The price action formed a small body negative candle with a long lower shadow but it maintained its rhythm of higher high and higher low.

After witnessing a breakout in the broad trading range on October 29, Nifty continued its upward march. However, if we analyze the price action, the bulls logged an open=high, that is, the opening level was equal to the day's high and closed below the session's opening. This indicates that the bulls must be exhausted and Nifty may enter into a consolidation phase before moving on to our final target of 11,980 levels.

In the coming session, the low of the prior bar, that is 11,784, would now act as an immediate support level, followed by 11,720 levels. While on the upside, the immediate resistance would be seen around 11,880 levels. As the day progresses, we expect volatility to kick in due to the expiry of the current series. Hence, keep a trailing stop loss at 11,720-11,700 levels for long positions. The RSI on the daily chart has marked a fresh 14-period high, which is bullish. The MACD line is above the signal line and the histogram suggesting the bullish momentum.

To conclude, the markets can trade both directions in today’s session, owing to the expiry of the current series. However, odds still heavily favor longs, if the trending daily 8EMA persists. Odds would start to shift if we get a close below 11,700 mark.

Reliance Industries: Reliance Brands Limited, a subsidiary of the company, has increased its equity shareholding in Future101 Design Private Limited (Future101) by 2.5 per cent for a consideration of Rs. 2.00 crores, taking its equity shareholding in Future101 to 17.5 per cent.

Vodafone Idea: Care Ratings (CARE) has downgraded its rating on the long term bank facilities and non-convertible debentures to CARE A-.

ICICI Lombard General Insurance Company: ICICI Lombard announces Bancassurance tie-up with Karur Vysya Bank.

TVS Motor: TVS Motor company strengthens its presence in Central America by partnering with Cadisa Group for Guatemala & El Salvador.

Intellect Design Arena:  Intellect Design Arena has signed a multi-million deal with the UK’s Commonwealth Trade Bank for digital solutions.

CreditAccess Grameen: Board authorized to raise up to Rs. 1,000 crore via NCDs.

HDFC: HDFC said that it has been allotted 15.93 crore shares or 9.9 per cent stake in  Bandhan Bank post the merger of Gruh Finance and Bandhan Bank.

Arrow Greentech: There was a fire accident at the company factory situated at Ankleshwar. The fire has been brought under control by the Fire Birgade and there has been no loss or injury to human life.

Bharti Airtel: Fitch placed Bharti Airtel on Rating Watch Negative on Supreme Court ruling.