Index trend and stocks in action on August 12, 2020

For markets, it was yet another dull day. More or less, a test match kind of action was seen in a T-20 cricket match. Nifty started off the session with full zeal and enthusiasm and oscillated in a range of 74 points, before signing off the session with gains of 0.46 per cent at 11,322.

The price action formed a Doji candlestick pattern as the price closed near to opening levels. This was the fifth bar in a row, where Nifty had formed an indecisive candle.

Moreover, the day’s range, which was confined to 74, led to a formation of NR7 bar, which means that the current bar’s range is narrowest in the last seven trading sessions. So, an NR7 bar and a Doji is a perfect compression pattern and hence, the high and low of Doji’s candle would be important and closely monitored by the traders.

On the lower timeframe, i.e. hourly timeframe, the index was able to sustain above the 20-MA, which is positive. However, there was a negative divergence formation on the leading indicator RSI.

Going ahead, the level of 11,280 is a very important support for the index, and as long as it stays above this level, be with a bullish bias. However, going below this level would mean that the bears are tightening their grip and the index could slip further towards the levels of 11,200.

As the formation of Doji indicates a tussle between the bulls and the bears near the swing high, it would be interesting to see which one triumphs as it would depend on the levels of 11,280 and 11,380. If the index moves below 11,280, bears would have an advantage, while above 11,380, the bulls would break the shackles and regain their power.

JMC Projects: JMC Projects bagged new orders worth Rs 1,363 crore.

KRBL: The board of directors of the company discussed potential hive off of the company’s Energy business into a newly-formed legal entity ('potential restructuring'). The intent of the said potential restructuring is to unlock the value of Energy business separately.

Hexaware: Hexaware and Freshworks form strategic partnership to transform customer and employee engagement.

Eicher Motors: The members of the company at an annual general meeting approved the sub-division of each existing equity share of the face value of Rs 10 each into ten equity shares of the face value of Re 1 each.