Index trend and stocks in action on February 12, 2020

After displaying a weakness in the previous two sessions, Nifty witnessed a positive start on Tuesday, but it failed to sustain the highs and trimmed its gains to end the session near the opening levels. At the close, Nifty settled at 12,108 with gains of 0.63 per cent.

The price action formed a ‘Gravestone Doji’ like pattern. Technically, Nifty retook its 50-DMA and also, it crossed the recent swing high of 12,160 on Tuesday and registered new swing high of 12,172, however, it failed to sustain at the highs and it ended the day near the day’s low and below its 50-DMA. On Friday, Nifty formed a bearish engulfing pattern at the resistance point. And on Tuesday, it also formed a gravestone doji at the same resistance. These kinds of bearish patterns at the resistance point have more relevance than elsewhere. The zone of 12,160 is a multiple resistance/support area.

Going ahead, the bulls are expected to witness a momentum on the upside, only if they manage to convincingly close above the 50-DMA and stays above that level for a couple of days. The next two days’ price action is very crucial for near-future trend. In any case, Nifty closes below the prior bar low or gravestone doji low of 12,099, which could be the first sign of weakness. In that case, the fall is up to 11,929. This is the level of the prior base, where we may see some buying interest. We expect a sharper decline again only below this level. It’s time to be cautious at this juncture, unless the resistance zone is decisively taken out.

Overall, we do not expect a runaway rise in the markets as long as Nifty is not able to cross and convincingly close above the 50-DMA.

SPARC: The company has received a Complete Response Letter (CRL) from United States Food & Drug Administration (USFDA) for the New Drug Application (NDA) for Taclantis™ (Paclitaxel Injection Concentrate for Suspension). The company is reviewing the CRL and intends to work with USFDA as soon as possible to address the concerns raised.

IndusInd Bank: Moody’s changed its outlook on IndusInd Bank to ‘negative’ from ‘stable’ to account for the risk of further asset quality deterioration. 

Glenmark Pharma: The company is considering to raise funds via debt on February 14.

Mercator: SBI and ICICI Bank have filed proceedings against Mercator under the Insolvency Act to recover dues.

NHPC: The firm raised Rs 1,500 crore via bonds on private placement basis.