Nifty trend and stocks in action on October 07, 2020

Nifty gapped for the third consecutive session on Tuesday. Post that, it traded within the first-hour range until the last hour of a sharp rally. The pied pipers of Tuesday’s rally were the HDFC twins as they contributed nearly half of the gains for Nifty. In the end, Nifty settled at 11,662, up by 159 points as it recorded its highest closing since February 26.

The price action of the day formed a bullish candle, carrying higher high and higher low and this candle helped to negate the bearish implication of the shooting star pattern, which was formed on Monday. Now, Nifty has rallied nearly 8 per cent from September 24 low and with this, it surpassed its overhead resistance of a downward sloping trendline and also, its previous swing high of 11,618, which was registered on September 16.

As the index crossed its previous swing high, it has negated the sequence of lower highs. Hence, this could be a positive indication for the index. Adding further to the bullish choir is the concept of faster retracement as Nifty has currently retraced almost 88 per cent of the preceding 18 session’s decline from 11,794 to 10,790 in just seven trading sessions. The ongoing faster pace of retracement denotes a healthy price structure that augurs well for further advancement towards the levels of 11,794 in the near term.

On the downside, immediate support is seen around 11,550-11,564 levels, and as long as the index stays above this level, be with a bullish bias.

The leading indicator RSI has witnessed a breakout of the downward sloping trendline and it has entered into a bullish territory, which is positive. Further, despite a strong rally from the lows of 10,790, the RSI has not yet reached the overbought territory. The directional indicators i.e. +DI is trading above the –DI and the +DI is in a rising trajectory, which is again a positive sign for the bulls.

As the price structure and indicator set-up are clearly suggesting a positive bias, we would advise the traders to continue with long positions and look for booking profit around the level of 11,750-11,794.

Sunteck Realty: The company informed about its operational update for Q2FY21. It stated that its pre-sales grew by 98 per cent QoQ in Q2FY21 and collections were up by 117 per cent QoQ.

Reliance Industries: Reliance Industries and Reliance Retail Ventures Limited (RRVL) announced that a wholly-owned subsidiary of Abu Dhabi Investment Authority (ADIA) will invest Rs 5,512.50 crore into RRVL, a subsidiary of Reliance Industries.

Tata Motors: Tata Motors Group global wholesales in Q2FY21, including Jaguar Land Rover, were at 2,02,873 nos, lower by 16 per cent, as compared to Q2FY20.

Bajaj Finance: Customer franchise as of September 30, 2020, stood at 44.1 MM as compared to 38.7 MM as of September 30, 2019. During the quarter, the company acquired 1.2 MM new customers. New loans booked during Q2FY21 were 3.6 MM as compared to 6.5 MM in Q2FY20. The company continues to remain well capitalised with a capital adequacy ratio (CRAR) of approximately 26.5 per cent as of September 30, 2020, while maintaining the highest-ever liquidity buffer.

IEX: The board of directors in their meeting held on October 5, had considered & approved a further investment of Rs 6.25 crore in Indian Gas Exchange Limited, a wholly-owned subsidiary of the company, by way of subscription to equity shares through the rights issue.