Nifty trend and stocks in action on October 09, 2020
In the T20 World Cup of 2007, it was Yuvraj Singh, who took Stuart Broad to knockers as he hit 6 sixes in a row! On Thursday, D-Street too witnessed a similar magical moment as the bulls knocked 6 sixes in a row i.e. they gained for the sixth straight session!
On Thursday, Nifty surpassed its previous swing high that was registered on August 31 and went onto hit an intraday high of 11,905.70. However, in the second half of the trading session, the market participants preferred to take profits off the table, ahead of RBI Monetary policy and as a result, Nifty trimmed almost 75 points from the day’s high and closed precisely at the opening level.
The price action of the day led to the formation of a Doji candlestick pattern but this Doji is in fact, a Gapping up Doji pattern. A Gapping up Doji is created when the open and close of the day is near to each other but the lower shadow remains above the prior day’s upper shadow, leaving a gap on the chart.
Theoretically, this pattern is supposed to act as a bullish continuation pattern but if we analyse it closely, we can see that the difference between high and close is greater than the difference between low and close, which suggests that the bears have some weight in the game. Besides, author Thomas N Bulkowski, in his extensive study, also found that after the formation of Gapping up Doji, price reverses the uptrend 57 per cent of the time. Hence, the next trading session is crucial and it’s an event day as RBI Monetary Policy is due today.
Going ahead, the index may turn a bit volatile or sideways in the near term as it will be difficult to maintain the momentum, as signs of exhaustion are already visible. Secondly, the broader indices i.e. the Mid-cap and Small-cap have underperformed in the last couple of trading sessions; this clearly indicates that the market participants are risk-averse at these levels. Also, the advance-decline ratio for the second straight day was titled in favour of the decliners.
We would advise the traders to maintain a strict trailing stop-loss at Thursday’s low (11,791) as any close below this, would result in a giving a foot in the door for the bears. The next major support is seen around 11,620-11,630 levels. While on the upside, the level of 11,905-12,000 is a key resistance level.
Voltas: The no. 1 AC brand, from the house of Tata’s, has further reinforced its leadership position in the cooling products space, by launching the new Voltas PureAir AC, a UV-based split inverter AC.
Cybertech: Further overseas direct investment (ODI) of USD 2,00,000 has been made in Spatialitics LLC, USA, a wholly-owned subsidiary of the company.
Ramco Cements: The company inaugurates plan operations of the grinding unit in Odisha.
Solar Industries: Solar Industries India Limited and its subsidiary, Economic Explosives Limited, have received orders from Singareni Collieries Company Limited (SCCL) for the supply of explosives and initiating systems worth Rs 447 crore, to be delivered over a period of two years.