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Nifty trend and stocks in action on September 22, 2020

Karan DSIJ
/ Categories: DSIJ Mindshare
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Nifty trend and stocks in action on September 22, 2020

Nifty moved in a sideways range for the first couple of hours of the trading session. However, as the session progressed, it went down like ninepins and ended the day with mammoth losses of 2.21 per cent. Only 3 stocks in Nifty50 closed in the green while the rest, ended in red; such horrifying was the attack by the bears.

The price action of the day formed a long body bearish candle, which in technical parlance, is referred to as a ‘long black day’ candlestick. Further, this long black day candlestick has pierced the trendline support, which was formed by joining August and September low. Also, the index has closed below the 34-EMA ribbon for the first since the last week of May 2020.

The prior swing low of Nifty is placed at 11,185 and a parallel support line is placed at 11,111. These two are very critical support levels for the index in the near term. In case, Nifty slips below the prior swing low of 11,185, the first lower low will be formed and the trend would classify to downtrend. However, in the past, we have seen a follow-up move on the downside is hard to come by; so, will it be different this time? As in the previous occasion also, a big bearish candle was formed on Monday i.e. August 31 but a follow-up selling was missing and thereafter, Nifty oscillated in a range.

So, Tuesday’s session would be crucial if we witness a follow-up selling and close below 11,185 as it would further create a panic situation in the market. However, if the index manages to hold above 11,185 and trades above the 11,340 mark, bears would lose their advantage for the time being.

The RSI has broken down the downward channel near the 40 zone, where Nifty finds support in the past for several times. The MACD histogram also increased and is suggesting that the bears are in control now. Keep a close tab on the RSI level of 40; if it breaks this level in the coming days, it would be a concern for the bulls.

Overall, the level of 11,185 is an important support in the near term. Hence, keep a close tab on this level while on the upside, the level of 11,340 would act as immediate resistance.

 

Jindal Steel & Power: The company has clarified to a news report stating that all transactions entered into by the company were part of routine business activities and the transactions had the proper underlying assets. The company had fully complied with all the extant regulatory guidelines at the time of these transactions. JSPL does business transactions with numerous traders who buy steel & pellets from the company, as well as supply raw materials to the company. All such transactions are done strictly within the required legal framework and as per the law of the land.

Karda Constructions: The company has commenced the construction work of building Destination One Mall, against the work order awarded by Shree Sainath Land & Development (India) Private Limited.

TCS: Tata Consultancy Services recognised for best advance in creating a talent strategy, best learning program supporting change transformation, and best use of games and simulations for learning.

L&T: The company announced 100 per cent completion & readiness for commissioning of the 99-MW Singoli-Bhatwari Hydroelectric Power Plant.

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