Nifty trend and stocks in action on September 24, 2020

Karan Dsij
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Nifty trend and stocks in action on September 24, 2020

Nifty opened the session with a positive bias, owing to strong overnight cues from Wall Street. However, after opening at 11,258.75, Nifty failed to capitalise on the strong start.

In fact, the opening of the day and the high of the day was more or less similar. Nifty pared it gains soon after opening and moved below the 11,200 mark. For the next couple of hours, a sideways action was seen and in the afternoon session, bears took the charge, and soon, Nifty breached its previous day’s low and marked a swing low of 11,024.

However, recovery in the last leg of the trade helped the index to trim its losses and end the session with modest losses. Still, it closed down by about 125 points from its highest point of the day.

The price action of the day formed a bearish candle with a lower shadow, which indicates some buying interest at lower levels. Despite moving below its prior day low and below the downsloping channel on an intraday basis, the index managed to hold its support of the lower end of the channel and prior day low on a closing basis.

Moreover, if one shift to a lower timeframe chart i.e. 60- minutes, there is a divergence seen on the chart. The low of the prior session, which was around 11,084, strongly penetrated and closed outside the lower Bollinger band and then the price retraced. After the retracement prices were pushed down to make a lower low, despite the index making a lower low as compared to its prior low, the lower low remained inside the lower Bollinger band and this resulted in the divergence of the Bollinger band. Further, there is also the RSI divergence seen on the 60-mins chart as the price has made a lower low, but the RSI has made a higher low. So, let’s see whether these divergences help to revive the bulls or not as this turns out to be a trick by bears just to trap buyers.

Also, if one looks at the current decline of Nifty, it has extended its fall for the fifth consecutive session and in recent times, it is one of the record losing streaks and in conjunction with RSI support at 40 on the daily timeframe. If we purely look at these signs, we believe that a pullback is likely on the cards towards the levels of 11,210-11,275. But beyond this, the survival of the bulls would be a big task to ask for.

Hence, as long as Nifty trades above Wednesday’s session low of 11,024, expect a pullback in the market, while the breach of 11,024 could deepen the wounds of bulls as the correction could extend towards 10,940-10,900. All-in-all, it's a monthly expiry day and if bulls can defend the level of 11,024, a sideways to positive bias could be seen.

Hexaware Technologies: Baring Private Equity Asia Ltd (BPEA) through its affiliated entities HT Global Holdings BV (the acquirer) and HT Global IT Solutions Holdings Limited has agreed to take Hexaware Technologies Ltd (Hexaware) privately through an ongoing delisting process. Under the transaction, the acquirer will purchase an approximate 29 per cent stake from the public shareholders, increasing the combined ownership of BPEA-controlled entities to approximately 91 per cent.

Datamatics: Datamatics announces the expansion of distribution agreement with Ingram Micro for the META region for its intelligent automation (IA) products.

TCS: TCS and Yale University, jointly announced the launch of a new framework that could help ensure privacy and trust in peer-to-peer digital networks. This would be a critical element in enhancing blockchain solutions for greater adoption by consumers.

Aurionpro Solutions: Aurionpro has won an order from Rail Vikas Nigam Limited, for the supply, installation, and maintenance of the smart mobility system for Kolkata Metro Phase I, covering two metro stations.

IRCON: The company has secured works of a total of 9 roads over bridges (ROBs), valuing more than Rs 400 crore from the Ministry of Railways, Government of India. The work has been awarded by the Ministry of Railways through competitive bidding among PSUs.  

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