Index trend and stocks in action on August 26, 2020

Nifty opened higher and managed to scale to the levels of 11,500 but on the higher side, the bears did not allow the bulls to stretch their arms. As a result, Nifty failed to hold on to the intraday gains.

At one point, Nifty lost almost 102 points from the day’s high. However, the 50-hourly MA came to rescue the bulls as the index took support at 50-hourly MA and recouped some losses in the last hour of the trade. Finally, Nifty ended the day with a minor gain of 5.80 points or 0.05 per cent to close at 11,472.25.

The price action formed a small body bearish candle. However, it continued forming higher high and higher lows for the third consecutive sessions. The index has marked higher highs but most of the indicators, including the daily RSI, have not reached the prior highs. Commodity Channel Index (CCI) and Martin Pring’s KST indicator has also supported the same phenomenon. The trend strength indicator ADX is also moving downwards. These factors, maybe giving some suspicious vibes about the continuity of the upward rally in the markets but it does not mean that we should go ahead and short the markets blindly as it needs to be confirmed by price.

As long as the resistance zone of 11,536-11,600 is not cleared convincingly, do not expect a run-away rise. On the downside, the zone of 11,410-11,370 is likely to act as immediate support. While the major support is placed in the zone of 11,290-11,240 as it is the confluence of swing low and short-term moving average, i.e. 20-day SMA.

Even though the index is moving higher, the formation of multiple small body candles is clearly indicating a loss of buying interest at higher levels. Keep a strict stop-loss for long positions and be bearish only below the close of 11,240 levels.

Jammu & Kashmir Bank Ltd: The board of directors of the bank shall inter alia consider the raising of capital (tier I/tier II) to tune of Rs 4,500 crore during the financial year 2020-2021, in the meeting scheduled for August 28, 2020.

Scanpoint Geomatics Ltd: The board of directors of the company in their meeting held on Tuesday have considered and approved the fundraising by the company of an amount aggregating up to Rs 25 crore by the issuance of equity shares of the face value of Rs 2 each (‘equity shares’) on a rights basis to all the existing equity shareholders of the company as on a record date and on such terms and conditions as may be decided by the board or committee thereof (‘rights issue’) subject to requisite approvals from the statutory, regulatory and other authorities, as applicable.

JMC Projects (India) Ltd: The company has secured new order of building projects in South India tolling Rs 315 crore and a factory project in Maharashtra of Rs 239 crore.

FDC Ltd: The company has announced its foray in the fight against COVID-19 by launching variants of the COVID-19 drugs, Favipiravir- PiFLU and Favenza, which will be used to treat mild to moderate cases of COVID-19 in India.