Nifty trend for Monday and stocks in news: Kellton Tech, Glenmark, GE Shipping, Shilpa Medicare and RITES.

Nifty is on seventh heaven as it extended its upmove for the seventh straight day on Friday and closed above the 11,900 mark.

On a weekly basis, Nifty rallied about 4.36 per cent. Like it’s said that a meal without dessert is incomplete, similarly, any strong rally on D-Street is incomplete without the contribution of the banking index. Banking Index i.e. Bank Nifty jumped 7.20 per cent for the week. Meanwhile, the broader indices underperformed the frontline gauges as Nifty Mid-cap lost 0.19 per cent while registering minuscule gains of 0.26 per cent.

Nifty has rallied almost 1,120 points in just ten trading sessions during the ongoing upswing from its September low of 10,790. With this, the index has reached to its pre-COVID levels and is just trading 4.5 per cent away from its lifetime high level of 12,430.50.

Nifty has moved higher within the last 10 days, which makes the current upswing, the longest swing since the last week of May in terms of length. The upswing of May 25-June 3 was about 6-day long but in percentage terms, in this upswing Nifty rallied almost 13 per cent. Both the swings i.e. the current one from September low of 10,790 and May 25-June 3, have quite a few things in common. To begin with, from its March lows, Nifty reclaimed its 21-EMA and the price trended higher to register a swing high of 9,889 but then, it breached the 21-EMA. So, the upswing of May 25-June 3 started its move under the 21-EMA and the current swing also began under the 21-EMA. Further, the slope of the moving average, which helps us to determine the trend of security, turned upside after moving in a downward trajectory. So, does that mean Nifty this time also would achieve the percentage target of May 25-June 3 swings?

Yes, we do believe that there is still some steam left on the upside. Why do we say so? Firstly, we did a comparison between the gains of two upswings i.e. of May last week and the current one in percentage terms. If both the swing are equalised then the current move needs to move higher by more than 3 per cent. Further, there is a concept of disparity index, which compares as a percentage, the latest one close to a chosen moving average. In this case, we are using 21-EMA as the chosen moving average in the recent past as we have seen that whenever the disparity index of 21-EMA reached anywhere between the 5.5-7, the index reverts to its mean (21-EMA). So in the current upswing, we are 3.93 per cent away from the 21-EMA, so this hints that some more upside is left.

Having said that, we feel the zone of 12,012-12,271 is a very crucial resistance level as it’s a confluence of the downside gap of February 24 and the day’s high of the Union Budget 2020 candle is placed in this region. So around these levels, we would recommend our readers to adopt a cautious stance.

Moreover, there are some more patterns, which are indicating to adopt a cautious approach. There is a concept of record session count i.e. when a candle session makes a higher high, the Japanese call it a record session high. In this record session count, eight to ten record sessions are of utmost importance; in Nifty, we have already reached the threshold of eight sessions, now the ten record sessions are approaching. And as per the theory of record-high sessions, a trader should stop buying aggressively after eight to ten record session highs. Further, an interesting observation is that Nifty is above the prior swing high but the RSI has not made a new high and the daily stochastic oscillator, reached the overbought territory.

From the above analysis, it is clear that at the current juncture, we cannot be bearish as there are no weak signs visible. At the same time, we cannot be complacent as we are approaching a crucial resistance area and Nifty is approaching ten record session highs with daily stochastic oscillators reached in the overbought territory. The support for the index has been placed around the 11,800 mark.

Kellton Tech solutions: Kellton Tech has been chosen by ZEE5, India’s Entertainment super app, to build a next-generation, cloud-native content management system (CMS) that delivers relevant, real-time content experiences across all constituents of business.

Glenmark: The ‘faith trial’ evaluated the possible superiority of the combination’s efficacy against Favipiravir monotherapy. As per the results that Glenmark presented to the regulator, the study showed no superior clinical outcomes with the addition of Umifenovir.

GE Shipping: Great Eastern (GE) Shipping Company Ltd signed a contract to buy a second-hand LR2 product carrier of about 105,258 dwt. The 2012 South Korean built vessel is expected to join the company’s fleet in Q3FY21.

Shilpa Medicare: The company has received a warning letter via email from USFDA for its Jadcherla facility (Telangana).

RITES: The infrastructure company, RITES Ltd, has secured consultancy orders for Rs 103 crore.