Index trend and stocks in action on January 17, 2020
The Nifty opened on a good note and made a new all-time high of 12,389. However, the index pared the initial gains to slip in the negative terrain, as the day progressed. However, it recovered from day’s low, thereafter, to end with miniscule gains of 0.10 per cent.
The price action formed a candle with miniscule real body with upper and lower shadow. This pattern resembles to a high wave formation. If we analyze the price action of the past two trading sessions, Nifty made two consecutive bearish patterns, hanging man and high wave, on a daily chart for the past two days. These patterns created skepticism about bulls’ dominance. Though it would require confirmation as usual on the next trading sessions, they have enough potential to stall the rally of the index for some time. The negative divergence in all major indicators is the other reason to doubt the further rally. Since all the pattern targets met, the continuation or extension of a rally requires a massive push from the fundamentals.
On the hourly chart, the Bollinger Bands narrowed again and the 20-DMA is actually flattened. Even in the hourly chart, the negative divergence in the RSI is clearly visible. As the benchmark index is trading at lifetime highs, no setup shows the bearish signals but the wavering price moments gives some kind of suspicion. A close below 12,270 may provide some bearish signs for the short-term. As long as it does not close below the prior bar low, be with the positive bias for the target of 12,400 and above. But, closing below 12,270 is likely to take us to 12,110 levels. Better be cautious about aggressive long positions in the index.
Rallis India: Metribuzin Phase II expansion of 500 MTPA is expected to be commercialised by February 1, 2020. The Board of Rallis has also approved setting up of a new ‘state of the art’ R&D facility in Bengaluru to drive further growth.
Shriram Transport Finance: Shriram Transport Finance completed allotment of senior secured notes worth $500 million.
GMR Infrastructure: The honourable Supreme Court of India lifts suspension of the environment clearance on GMR Goa International Airport.
Premier Explosives: Premier Explosives stated that there was a fire incident on January 15, 2020 at the company's Peddakandukuru Factory.
Nilkamal: Nilkamal Eswaran Plastics Private Limited, Sri Lanka (NEPPL), the subsidiary of the company has bought back the equity shares from its other existing shareholders, subsequent to which the percentage of shareholding of the company in its subsidiary has changed from 76 per cent to 96.28 per cent.