Index trend and stocks in action on July 16, 2020

A sharp rise and a steep fall have been the story of Nifty for Wednesday’s trading session. On the back of positive global cues, Nifty has started the day with a gap-up. At one point of the day, Nifty crossed 10,800 mark and registered a high of 10,827.45.

However, in the second half of the trading session, Nifty came off almost 250 points from the highest point of the day and slipped into negative territory. However, Nifty witnessed a minor recovery towards the end of the session and finally, ended the day with a modest gain of 10.85 points or 0.10 per cent.

The price action of the day formed a small body bearish candle with a long upper shadow. Currently, the index is trading below its weekly pivot and short-term moving averages, i.e. five-day EMA and eight-day EMA. The leading indicator, 14-period daily RSI, is currently quoting at 59.47 and is trading below its nine-day average.

Now, going forward, the zone of 10,480-10,550 is a crucial support level for Nifty due to its confluence of 20-DMA and 50 per cent retracement level of the last leg of upmove (10,195-10,894) placed in this region.

The current fall shall get accentuated if the index manages to close below this support region as it would result in a breakdown of the rising wedge pattern. Further, a close below 10,500-10,550 level would indicate the formation of an intermediate top. The next key support is seen around the levels of 10,180-10,200.

On the upside, immediate resistance is placed at the 10,800 mark, followed by 10,880, where the 200-DMA is placed.

Cochin Shipyard: The company has signed a contract for the construction and supply of two nos. of autonomous electric vessels for ASKO Maritime AS, Norway.

SBIN: The board said that it has approved raising capital of up to Rs 25,000 crore through bonds in the financial year 2020-21.

Titagarh Wagons: The company buys 50 per cent stake of its French joint venture partner Matiere SAS in Matiere Titagarh Bridges Private Ltd (MTBPL).