Index trend and stocks in action on February 03, 2020
Nifty came tumbling down on Saturday as the Union Budget 2020 was unable to live up to the expectations, as the market participants had expected more measures to revive economic growth. Nifty witnessed one of the its biggest single day fall in percentage terms since October 5, 2018 and ended the day with a deep cut of 300 points or 2.51 per cent. Overall, Nifty lost 4.79 per cent in the past week. This is the biggest weekly loss after September 2018 fall. Moreover, the recent outperformance of mid and small-cap also vanished. Nifty mid-cap and small-cap dropped 4.6 and 4.5 per cent in the last week.
The price action formed a gigantic bear candle carrying lower high-low and pierced important support of 11,800. Saturday bar was also a wide spread 7 (WS7), which means the price bar’s range is wider than the previous six bars range. Saturday bar range was of 384 points, whereas, 10-day average bar range is 142 points. Also, Nifty for the first time since October 15, 2019 has closed below the 100-DMA and it has closed near its 200-DMA. Further, Nifty has retraced over 38.2 per cent retracement of 22 week rally of almost 17 per cent in just a couple of weeks.
Going ahead, opening and price action near the 200-DMA would be interesting to monitor as failure to hold above the 200-DMA means more pain is in store for the markets. While defending the 200-DMA means a pullback rally is likely on the cards further, as the Bollinger Band expanded and Nifty moved out of the lower band, there is a possibility of a pullback. However, considering the current technically set-up, the pullback rally is likely to resist around the 11,800 mark.
The leading indicator RSI has reached to almost oversold condition on the daily time frame. On only three occasions in the last three years, RSI has reached below 30 level and bounced from 22-23 levels. Currently, it’s hovering near 30 mark. The MACD gave a sell signal on the weekly time scale after the sharp fall on Saturday.
Overall, the 200-DMA would decide the fate of the markets in the coming sessions. Watch out for 200-DMA as an important support for the index!
Coal India: The coal production grew by 10.3 per cent at 63.11 mt against 57.21 mt (YoY) in January. January coal off take grew 6.9 per cent at 56 mt against 52.44 mt (YoY).
MOIL: The company has fixed/revised prices of different grades of Manganese Ore and other products, effective from February 1, 2020.
Info Edge: The company would like to inform you that IE Venture Fund I has entered into an agreement to invest about Rs 252 million equivalent to USD 3.5 million, in Qyuki Digital Media Private Limited.