Index trend and stocks in action on May 20, 2020

The strong global cues helped Nifty to start on a buoyant note and made a high of 9,030. However, the index was not able to hold its early leads and shed more than 150 points from the day’s high. At the end of the day, Nifty settled below 8,900 mark.

The price action of the day formed an inside bar as the high is lower than the previous bar’s high and the low is higher than the previous bar’s low. In our last write-up, we had mentioned that given the sharp fall, we could see a pullback rally. However, we were alerted that on the higher side, Nifty is likely to face a resistance around 9,050 and it resisted near this level as it took a u-turn from 9,030 levels.

Going ahead, the important support for Nifty is placed around 8,800 mark and a decisive move below this support level, could drag Nifty towards 8,550-8,500 in the short-term. On the upside, the zone of 9,050-9,120 is likely to act as a stiff resistance.

On the hourly time frame, the price is trading below 20 & 50 moving averages. Besides, the 20-moving average acted as a stiff resistance of the day for the index.  

On the daily time frame, 14-period RSI is at 42.65. RSI remains neutral as it does not show any divergence against the price. The daily MACD stays bearish as it trades below its signal line.

Overall, sell on rise strategy is preferred as long as Nifty stays below the zone of 9,050-9,100.

Finolex Industries: The company has increased the turnover discount scheme (TOD) across its dealer network, which is in addition to the TOD that the company pays to incentivise its dealer network. This was the result of week-long deliberations that the company had with its dedicated network of dealers and employees based across the country.

Mangalam Drugs & Organics: The company has received a certificate of suitability (CEP) for API-Hydroxychloroquine Sulphate (HCQS) from European Directorate for the Quality of Medicines & Healthcare (EDQM).

Tata Power: The company approves the issuance of NCDs of Rs 1,500 crore.

Spice Jet: The company clarifies that it has been maintaining adequate cash flows to cover the reduced cost of operations.