Index trend and stocks in action on March 25, 2020

Nifty rebounded from Monday’s record fall and closed the extremely volatile session above 7,800-mark. Also, 35 out of 50 Nifty stocks closed in green. Nifty on Tuesday breached its yesterday’s low and made a new low of 7,511 but it closed in the upper half of the day’s range.

The price action formed a doji like candlestick pattern and this pattern indicate indecisiveness among the market participants. Formation of a doji candlestick pattern after a precipitous could mean a bottom; however, to confirm this, we need to see a follow through candle.

Going ahead, the low of Tuesday’s session (7,511) would be a critical level to watch out for the traders. Wednesday’s trading session remains a very crucial day to watch out, if the index manages to hold above 7,511 levels and witness a higher close with a higher high, it could result in the formation of a temporary bottom.  Why are we saying so? This is because after a doji candle formation, if we get a confirmation candle, this is a sign of a trend reversal. Further, for the first time since February 12, 2020, Nifty will see consecutive days of positive gains. Also, if you recall the positive divergence formation, which we had talked about in the last write-up, is likely to come in to play.

All-in-all, we have observed some early signs of temporary bottom formation for the short-term, given that the conditions we have mentioned are fulfilled. 

Gujarat Alkalies & Chemicals: The company has taken up a project for the expansion of 16,500 tonnes per annum (TPA) of Anhydrous Aluminium Chloride (AAC) plant at Dahej with the total project cost of Rs 35 crore. The commercial production at the said AAC Plant at Dahej has been achieved on March 23, 2020. The estimated increase in the annual revenue of the company from this plant would be about Rs 65 crore.

Apollo Tyres: The operations at the company’s plant in the states of Kerala (at Kalamassery & Perambra), Gujarat (at Limda) and Tamil Nadu (at Chennai) are shut down till March 31, 2020.

Rallis India: The company has commenced safe shutdown activities at its manufacturing operations located at Lote, Ankleshwar and Dahej. The duration of this shutdown is uncertain at this point of time. Besides, the resumption of operations at these locations will depend upon the directives issued by their respective government authorities.

India Grid Trust: IndiGrid completes the acquisition of its ninth transmission asset from Sterlite Power with an enterprise value of USD 134 million (Rs 10.2 billion).

IRCON: The company has fixed April 7 as the record date for 5:1 share split.

Nestle India: In view of the lockdown in many states/union territories across the country, the operations at some of the locations (manufacturing, distribution centres/ warehouses, offices, suppliers) are scaled down or suspended. As the company is into manufacture and sale of food & beverage products, the company is in discussion with the authorities to continue operations in the factories/distribution centres, where the operations have been suspended.