Index trend and stocks in action on June 04, 2020

Nifty extended its upmove for the sixth straight day in a row and after November 2019, it is the longest winning streak recorded by Nifty. Nifty opened the session with a gap-up and thereafter, the index traded in a sideways manner for the majority part of the trading session. It was only in the last hour of the trade that volatility sparked and Nifty witnessed bouts of profit booking. Amid all, Nifty managed to close above 10,000 mark with gains of nearly a per cent.

Since Nifty witnessed a drop of almost 110 points from its day’s high and the difference between the open and close was minimal, it led to a formation of small real body and the price closed near the bottom end of the trading range. In candlestick parlance, this pattern is known as a shooting star. Further, this is a NR4 bar, which means that Wednesday’s bar is the narrowest range out of the last four bars. This clearly indicates that the bulls are tired or taking a pause after a terrific rally of almost 13 per cent from its high to low in just six trading sessions.

Going ahead, the high of Wednesday’s bar of 10,176 is an important level to watch out on the upside. And on the downside, the low of Wednesday’s bar of 10,035 is likely to act as an immediate support. In case this level is breached, we would see a dip towards the level of 9,900-9,970 zone. While on the upside, the breach of 10,176 may take Nifty towards the levels of 10,250-10,300.

The RSI on the lower time frame or the hourly time frame, witnessed a negative divergence and the same has been confirmed as RSI closed below the prior swing low but it is still above the 60-mark.

Trader needs to keep a close eye on the high and low levels of Wednesday’s session as a breach of low would result into a dip towards the levels of 9,900-9,970.

Reliance Industries: The rights issue of Reliance Industries Limited (RIL) was subscribed 1.59 times and saw huge investor interest including from lakhs of small investors to thousands of institutional investors, both Indian and foreign. The public portion of the rights issue was subscribed 1.22 times.

HDFC Bank: Following  the  recent  rating  action  by  Moody’s  Investors  Service  of  the  downgrade  of  Indian  Government’s issuer rating from Baa2 to Baa3 with a negative outlook, the agency has downgraded the long-term issuer rating of HDFC Bank from Baa2 to Baa3 with a negative outlook. 

Eris Lifesciences: The company through its wholly-owned subsidiary, namely Eris Healthcare Private Limited, has incorporated a new subsidiary named Eris Pharmaceuticals Private Limited.

Jindal Steel and Power: JSPL records 28 per cent YoY rise in the monthly steel sales volume with the revival of domestic demand.