Index trend and stocks in action on March 27, 2020

Benchmark index-Nifty recovered 1,142 points or 15.21 per cent from Tuesday’s low. Nifty is above the two-day high or this week’s high. This is the second time that Nifty is closing above the prior bar high after Friday. This may be because of expiry hurry to close the short positions but, it failed to close above 23.6 retracement of the fall.

Theoretically, any price will not fall in a straight line fashion for a longer period. It takes some rest before continuing the prior trend. At some point of time, this resting will become a counter-trend rally. In the past bear markets, these counter-trend rallies were retraced about 38.2 to 50 per cent of the prior downfall. This time, Nifty registered the steepest fall in its history and fell a whopping 40 per cent in just 45 sessions, which is really hurting for any investor. It did not give a chance to exit.

Now, as long as Tuesday’s low of 7,511 is protected, we can expect a counter-trend. There are several supports placed at this zone. If we believe that ‘history repeats itself’, the retracement can go up to at least 38.2 retracement i.e. 9,390 but only if Nifty closes above 8,673. The next immediate resistance is at 8,883, which is Friday high. In any case, it extends the 50 per cent retracement which is at 9,970.  The probability going near to 20-DMA (9,762) is high. If at all this is a ‘V-shape’ recovery, do not expect it to sustain. If we see an ‘L-shaped’ recovery, we can hope that the bottoming formation is in place. Unless you see a flat-base bottom for at least eight weeks, do not trust any kind of recovery. Please be patient till a base is formed.

Piramal Enterprises: The company informed that CARE affirmed its AA/stable credit rating for additional non-convertible debentures issuance of up to Rs 1,000 crore.

NTPC: The company executes SPA with government for the acquisition of THDC India and NEEPCO for Rs 11,500 crore.

Sanghvi Movers: ICRA retained company’s long-term rating at A- but revised outlook to negative from stable.

Vaibhav Global: The company announced the temporary suspension of manufacturing facilities, warehouses and offices across India due to COVID-19. Also, the company has informed that global retail businesses will continue to operate as usual, supported by global supply chain.

Finolex Industries: The operations at manufacturing plants and offices of the company situated in the state of Maharashtra are shut down till March 31, 2020 and manufacturing plant, warehouse and offices situated in other states, as notified by their respective authorities.

Maharashtra Seamless: The company has acquired an offshore jack up drilling rig form Star Drilling Pte Ltd (Singapore), an associate of the company for USD 100 million.

ICICI Bank: The company has allotted 19,890 equity shares of face value of Rs 2 each on March 26, 2020 under the employee stock option scheme (ESOS).