Index trend and stocks in action on January 27, 2020

The Nifty witnessed a blistering start at the beginning of the week, as it opened at a new lifetime highs, however, this euphoria did not last as Nifty has started to come off fiercely right from the top and on the same day, it ended almost down 200 points from the high of the day. The negativity continued subsequently for two sessions. But, Nifty recouped some of its losses in the last two trading sessions of the week. At the end of the week, Nifty closed with a net loss of 104 points or 0.84 per cent. Broader markets on the expected lines outperformed the benchmark indices with the Nifty mid-cap and small-cap closing higher by 1.57 and 0.91 per cent, respectively.

On the weekly time frame, Nifty has formed a bearish outside bar and it also resembles an engulfing bear candle. Interestingly, the week began with a formation of bearish engulfing on a daily chart and fell 342 points in just three sessions. During the sharp correction from all-time high levels, the 50-DMA acted as a support. The last two days pullback has helped index to retrace 50 per cent of the recent fall.

As we are entering into the Budget week, the markets are expected to trade with a high volatility. The immediate resistance for the index is placed at 12,300 levels as it has 61.8 per cent retracement of the recent fall. If this pullback needs to sustain, it is important for Nifty to sustain above the 12,300 mark for at least two days.

The positive take away from the last week action is that-Nifty did not make a lower low. In the coming days, if Nifty falls below the January 22 low of 12,087, the minor uptrend would be in danger. Further, failure to hold 11,929 levels would result into serious threat to the bulls.

Overall, we expect volatility markets to witness significant volatility. Bullish momentum will continue on close above 12,300 mark, while on the downside 12,087 is a key support.

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Stride Pharma Science: Strides announces the successful completion of USFDA inspection at its Alathur (Kerala) facility with Zero 483 observations.

TVS Motor: The company announced its foray into electric mobility with the launch of the scooter TVS iQube Electric in Bengaluru.

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PSP Projects: The company is in receipt of LOA/work order worth Rs 357.90 crore (excluding GST) for institutional, industrial, government and government residential projects from various clients.