Index trend and stocks in action on March 06, 2020
Nifty opened on a positive note and soon it pared its initial gains, however, in the late morning session, bulls regained their lost strength and it managed to cross prior session’s level to touch a high of 11,390. However, it was unable to sustain at higher levels and it erased all its intraday gains to settle with miniscule gains.
The price action formed a small body bear candle with a long upper shadow. Technically, this pattern indicates that Nifty is unable to sustain at higher levels and facing supply at the upper end of the consolidation range. Also, if we sum up the price action of the last three days, the movement of index is within the limits of Monday’s bar. On Thursday, even though it moved above the prior bar high, it did not sustain and closed near the day’s low point. As weekly derivative settlement was on the cards, the volatility within the range was very high. Now, Monday’s high of 11,433 has become an important resistance point. If there is any move above this level, then Nifty may attempt to fill the gap. On the upside, 11,433-11,536 will become a resistance zone. It is difficult to move above the level as sentiments are at rock bottom.
Going ahead, in any case, if Nifty closes below 11,244, which is Thursday’s low, it will be an indication of the continuation of downtrend. However, a close below 11,000 level will have severe repercussions on the market. In current conditions, the indicators may sustain in oversold conditions for longer than expected period. Unless stronger positive divergences appears and confirms the breakout, it is better not to venture for a long position. On the higher side, 11,433 is likely to act as a strong resistance level and downside potential remains intact until Nifty trades below this level.
Dr Reddy’s Laboratories: The audit of our API Manufacturing Plant-five at Miryalaguda, Nalgonda district (Telangana) by USFDA, has been completed. It has been issued a form 483 with three observations.
SBI: SBI has clarified in regards to Yes Bank that the latter was discussed at the meeting of the Central Board of the bank and an in-principle approval has been given by the Board to explore investment opportunity in the bank.
HCC: HCC's default in loans stand at Rs 622.27 crore and the total financial indebtedness to the bank and financial institutions stand at Rs 3,182.74 crore , as on February 29.
Lemon Tree: Lemon Tree Hotels has signed a license agreement for a 62-room hotel at Agra.
Pidilite Industries: The company has incorporated a joint venture company in the name of Pidilite C-Techos Walling Limited to carry on the business of construction of building work or any other structural or architectural work of any kind using C-Techos wall technology, manufacturing of ACC panels and other ancillary products.
Ester Industries: the board approved plans to incorporate a wholly-owned subsidiary (WOS) and to expand its Polyester Film business by setting up a Greenfield project in the WOS. The facility is expected to become operational in the next 18 – 24 months and will help Ester Industries to enhance its market share.
Agro Tech Foods: Agro Tech Foods board approved an increase in royalty payments from 1.6 per cent to 2.5 per cent, of net proceeds of sales for all products under ‘Act-II’ brand with its holding company-Conagra Foods RDM. There will be an additional 1.75 per cent royalty for all microwave popcorn products with the brand name ‘Act II’. The royalty payment is for the usage of licensed trademark and know-how.