Index trend and stocks in action on July 07, 2020
Nifty opened gap-up in line with strong global cues and it extended its upmove for the fourth straight day on Monday. At the closing bell, Nifty surged 156 points to end at 10,763.65 levels.
The price action of the day formed a small body bullish candle with minor shadow on either side. In the last six trading sessions, Nifty has almost gained 588 points and in these six trading sessions, there are three gap-ups. However, if we look at the range of daily bar size i.e. high to low, its spread is narrow so, it can be seen that in the last trading session, all candles have a spread of below 10-day average spread. Further, some candles are indecisive in nature. Though the trend of the index remains in an upward trajectory as we have the formation of a higher high and higher low, the upward march of the index is more due to the gap-ups.
With the recent rapid rise and narrowing range bars, we would advise traders to follow a strict trailing stop-loss for the long position as there is no signal for short selling unless the index closes below the prior bar and forms a lower high.
The daily 14-period RSI has entered into overbought territory for the first time after November 7, 2019.
For the day, the gap area of July 6 (10,631-10,695) is likely to act as strong support and on the upside, 10,820-10,880 is likely to act as a resistance.
Greaves Cotton: Ampere Vehicles Private Limited, India, a wholly-owned subsidiary of Greaves Cotton Limited, has signed definitive agreements on July 6, 2020 to acquire the shares of Bestway Agencies Private Limited on a fully-diluted basis through secondary purchase.
Bharti Airtel: Airtel steps up the experience for its platinum customers. It assures faster 4G speed to platinum customers through network preference.
MFSL: A clarification has been issued from the Group clarifying regarding the sale of shares of Max Financial Services Limited (MFSL) that aforesaid news item is totally misconceived and IDBI Trusteeship Services Limited did not sell any share of MFSL, as claimed under the aforesaid news article. On the contrary, 12,50,000 shares of MFSL were released by the Trustee to the Promoter group on the instructions of the lender on account of a release event in terms of the loan agreement, resulted in reduction in the number of pledged shares.
Manappuram Finance: Financial resources and management committee of the board of directors of the company held on July 06, 2020 approved the issuance of the private placement of rated, secured, redeemable non-convertible debentures up to Rs 300 crore.