Index trend and stocks in action on January 16, 2020
Yesterday, Nifty opened in the red and moved toward the day’s low of 12,279. However, the index reversed sharply in the final hour of the day to trim major portion of losses and closed near day’s high.
The price action formed a small body candle with a long lower shadow. Technically, this pattern resembles hanging man pattern. The correction in the index took support around the previous swing high zone, as the concept of change in polarity played a perfect role, that is, earlier resistance turned support. As far as the levels are concerned, any close below the prior bar is the first sign of weakness. A close below 12,270 may initially lead to a reasonable correction to the 12,100 level. It is only below this that the index may move lower than the recent swing low of 11,929. A close below 11,929 is a trend reversal sign. On the upside, a close above 12,395 will lead to the level of 12,519.
As for Nifty, as it trades at a lifetime high, the trend is clearly upward. However, the momentum is waning. Just as a high is a new normal, the negative divergences have also become normal. Very serious negative divergences are visible in the leading indicators. Most of the daily bars are small in size or bearish in nature. At its lifetime high, the leading indicator RSI is still struggling to move above the prior swing high. It is moving in a downward channel.
Overall, the trend is upward but the momentum is waning and, as long as Nifty trades above 12,270 continue with long positions.
Yes Bank: Yes Bank acquires 10.25 per cent stake in Sical Logistics via pledge invocation.
Torrent Pharmaceuticals: The Board will consider raising funds via equity on January 27.
Asian Paints: The Competition Commission of India (CCI) has passed a prima facie order dated January 14, 2020, commanding the Director General to run an investigation against the company under the provisions of Section 26 (1) of the Competition Act, 2002, on the basis of information received from JSW Paints Private Limited.
Kotak Mahindra Bank: Kotak Mahindra Prime Limited, a wholly owned subsidiary of the Bank, has executed a Share Purchase Agreement for the sale of its entire equity stake of 5.56 per cent in Equifax Credit Information Services Private Limited.
DFM Foods: The Promoters and other shareholders have executed the transfer of their shareholding (as contemplated in the SPAs) to the purchaser in accordance with the terms and conditions of the SPAs (as amended from time to time) by way of an on-market trade.
Mangalam Cement: Waste Heat Recovery (WHR) plant, consisting of a capacity of 5 .15 MW out of total capacity of 11 MW, has been commissioned and the remaining capacity of 5.85 MW are also expected to be commissioned during the current quarter.