Index trend and stocks in action on January 28, 2020

Nifty opened with a downside gap and thereafter, it made an attempt to show some recovery. But, it failed to sustain at higher levels and in the second half of the trading session, weakness got intensified and Nifty closed near the low.

The price action formed a bear candle carrying lower high and lower low in comparison to the prior trading session. Nifty retraced 50 per cent of the previous decline and failed to carry the momentum as global cues turned sour. Also, Nifty ended the session below its 50-DMA. Though Nifty ended the day with major losses, it escaped a distribution day as the volume of shares traded was less than Friday’s session. Monday’s weakness indicates a possibility of Nifty retesting its gap support area of January 9.

In the coming session, price action of Nifty around the 50-DMA will be closely monitored by the market participants and if Nifty fails to reclaims its 50-DMA then, the status of Nifty might change to an uptrend under pressure. Also, if Nifty fails to crawl back above the 12,120, which is 61.8 per cent of rise from 11,929.60-12,430.50, it would be considered as a weak uptrend as it is not usual for the price to correct more deeply and the deeper the correction, the lower will be the probability that a trend would resume within a reasonable period. The leading indicator RSI on the daily time frame is around 46-mark, meanwhile, the band of 44-46 is a crucial level on the RSI. 

January 9 gap area is likely to be an important support to watch out and on the upside, the level of the zone of 12,230-12,280 is likely to act as a resistance in the short-term.

Prakash Industries: The company has registered a growth in its Sales volume during Q3FY 2019-20 despite the challenges faced by the steel industry during this period. Prakash's Q3 steel sales volume at 2.53 lakh tonnes records a growth of 6.4 per cent on QoQ and 2.5 per cent on YoY.

Cholamandalam Investment and Finance Company: QIP Committee approved the opening of the issue on January 27, 2020.

Maruti Suzuki India: Maruti Suzuki India announced a price change for select models owing to an increase in input costs. The price change varies across models and ranges from 0 per cent to 4.7 per cent (ex-showroom - Delhi). The new prices are effective from January 27, 2020.

Adani Gas: The company clarifies in relation to the news about Rs 400 crore of a penalty being charged. The company says as on date, no penalty has been charged on the company and it has duly responded to Petroleum & Natural Gas Regulatory Board (PNGRB) about the same.

GHCL: The board approves a buyback of up to 24 lakh equity shares.