Index trend and stocks in action on March 12, 2020

Nifty opened on a weak note and the day’s open was equal to the day’s low. Thereafter, the stock moved higher but after an initial push, Nifty did not take any directional bias as it traded with high volatility swinging 100 points on either side. At the end of the day, Nifty ended with miniscule loss of seven points.

The price action formed a bull candle with an upper shadow. Also, it is an inside bar as price traded with a high to low range of the prior bar. There were some positive takeaways from Wednesday’s session, firstly, the bulls managed to defend Monday’s low despite a high volatility and secondly, open of the day was equal to the day’s low. Going forward, Wednesday’s session low of 10,334 is likely to act as a key support in the coming session and on the higher side, high of Wednesday’s session is likely to act as a resistance level.

The 14-period RSI is deeply oversold and considering the oversold nature of the index can trigger a technical pullback. Also, ADX value has reached around 41-mark and has turned exactly from this mark like it did earlier, in the month of June and August 2019.

Given the oversold nature of the index and weekly expiry, we expect a technical pullback in the index; however, we would suggest not chasing the up move blindly. 

Biocon: Biocon announced that it has won US court ruling that invalidated a Sanofi patent on Insulin Glargine device, removing a key legal hurdle to commercialise Semglee (Insulin Glargine) co-developed with Mylan, in US.

Hikal: Hikal clarified that the company’s Mahad unit has been operating normally and there is no closure yet. The company’s Mahad unit had received a closure notice from Maharashtra Pollution Control Board (MPCB). The company is working with MPCB to resolve the matter amicably and is confident of a positive outcome.

Canara Bank: Canara Bank has allotted bonds worth Rs 3,000 crore on March 11.

SMS Pharmaceuticals: SMS Pharmaceuticals received an establishment inspection report by USFDA for inspection at the company’s API facility in Andhra Pradesh.

SH Kelkar: The company said our business will be largely unaffected by any supply chain disruptions on account of COVID-19.