Nifty trend for Friday and stocks in news: Tech Mahindra, Bharti Airtel, AstraZeneca and Persistent Systems
Thursday’s market crash proved the age-old saying of D-Street, ‘bulls walk up the stairs, bears jump out of the window’.
Nevertheless, on Thursday, Nifty witnessed a scary fall and recorded its biggest single-day fall in percentage terms after May 18. The mighty bears were so fierce that only three stocks of Nifty 50 index managed to close in green and that too with minuscule gains. Besides, all the sectoral indices witnessed a bloodbath.
The fall was so severe in nature that Thursday’s big bearish candle had engulfed the previous five trading sessions’ candles along with cornering the bulls in such a manner that all the key short-term support was taken down in just a single bar. The candle formation on the chart resembles the session of August 31.
Hence, if we take cues from that phase, what happened after the formation of the mammoth bearish candle is that the price failed to move below the low of the big bearish bar and it retraced nearly 50 per cent of the move of the big bearish candle. As it’s said that history has a tendency to repeat itself, would it do so this time as well? For that, Nifty needs to hold above the low of the prior bar i.e. 11,660.
Going ahead, the immediate support for the index is seen around the level of 11,660, followed by 11,610. In case, if Nifty does not hold this support, it’s likely that the index would go on to test 20-DMA in the near term.
On the lower timeframe i.e. the 60-minutes, we had seen a breakout of a flag pattern on Wednesday; however, there was no follow-through buying, which resulted in a trap for the buyers. Further, there is a concept of walking the bands in the Bollinger Band. It helps us to know when the trend is strong. The thumb rule says that when the trend is strong, prices tend to hug the bands, and we are witnessing a similar trend in the lower timeframe as the price is walking with the band in the downtrend. Also, there is a formation of a double top pattern in the 60-minutes chart, and with Thursday’s ferocious falls; the index breached the neckline of the double top pattern.
Hence, it would be interesting to see whether the price manages to hold above the 11,660 levels in the coming sessions. If it does, then there are chances to see a pullback max towards the 50 per cent level (11,850) of the big bearish candle of Thursday like it did after August 31.
Traders need to keep a close watch on India VIX as a move above 24 would give us a hint that the market participants are sensing some uncertainty.
Overall, the bulls have lost their advantage and it is the bears that are in the driving seat now. Hence, the market participants should keep a close eye on the support level of 11,660 as a breach of this support level would mean that the index may retest its 20-DMA.
Tech Mahindra: The company has executed a joint venture agreement with M/s Sumitomo Corporation, Japan.
Bharti Airtel: The company informed that upon the receipt of approval from Competition Commission of India (CCI) and after the completion of other condition precedents agreed between the parties, the first closing has been completed and the securities of Nxtra Data Limited, a subsidiary of the company, have been issued to CA Cloud Investments, an affiliated entity of Carlyle Asia Partners V LP (an investment fund managed & advised by affiliated entities of Carlyle Group).
AstraZeneca: AstraZeneca Pharma India will launch Calquence in India on October 21, 2020.
Persistent Systems: The company announced it has entered into an agreement to acquire Palo Alto, California-based CAPIOT, including its subsidiaries in Australia, India, and Singapore.