Index trend and stocks in action on January 23, 2020

Nifty saw a positive start to the day only to witness a fresh round of selling at higher levels. As a result, Nifty continued to slide for third consecutive session.  Moreover, for a third day in a row, it has closed near the day’s low. Also, during the day, Nifty briefly undercut its 50-DMA but managed to close above it. The price action for the day has formed a sizable bear candle that has entered into gap area of January 9.

Technically, if we observe the up move since October 2019, the index has not corrected more than 365 points or nearly about 3 per cent from the swing highs and time-wise, corrections have not lasted for more than three consecutive sessions. In the current context, the index has already witnessed a correction of 343 points from recent highs over the past three sessions and it has now approached towards its crucial support area which is January 9 gap area. Hence, traders may expect a pullback from the current levels.  However, any pullback may be short lived as long as Nifty does not crosses the 12,250 mark on the upside, as this level is considered to be a stiff resistance point.

The leading indicator RSI is also rested near the prior swing lows. While, the daily MACD is bearish as it trades below its signal line. Overall, we expect to witness a pullback rally, but the sell on rise would be a preferred strategy for the market participants as long as Nifty stays below the 12,250 mark.

Oil India: Company has filed a petition before the honourable Supreme Court against its order and the next course of action would be based on the outcome of the petition.

UPL: UPL confirmed the news of the income tax departments searching their office premises and the company said that it is committed to fully cooperate with authorities in the ongoing research.

Datamatics Global Services: Datamatics Global Services said that the deal to sell stake in its arm CIGNEX Datamatics to Singapore-based Relevance Lab has not been completed, as the shareholders did not approve the proposed resolution. Both the parties are reworking on the revised structure of the agreement.

Cipla: The company informed that the United States Food and Drug Administration (USFDA) have classified the inspection conducted at its Goa manufacturing facility from September 16-27, 2019 as Official Action Indicated (OAI).

MRF: The company has partly commissioned Phase 1 of its greenfield unit at Dahej Industrial Area, Vagra Taluka, Bharuch district in Gujarat.

ITI: ITI Board approved a price band of Rs 72-77, for further public issue of 18.18 crore shares.