Stock Market Daily Updates 5 Oct 2020-Nikhil Bhatt | Research Analyst – SEBI

Dear Trader…

Index-based Indian stock markets rallied sharply after the US stock market eroded with the first debate between Donald Trump and Joe Biden as the countdown to the upcoming US presidential election began on the global front. 

Equity benchmarks staged a strong comeback after last week’s decline, supported by buoyant global cues. The Nifty ended the week at 11417, up 367 points or 3.3%. Broader markets performed in tandem with the benchmark as Nifty midcap, small cap rose over 3%, each.

The country is going through a difficult time now, with the state and central governments having to make up for the loss of revenue. At a time when the central government is also concerned about rising unemployment in the country due to trade-offs, economic recovery on the global front is becoming difficult and the global rating agency Standard & Poor’s (S&P) Maintaining the ‘BBB- / A-3’ rating with a stable outlook and the Indian economy is expected to recover rapidly in the post-Corona period.

Friends, We expect broader market to continue with its relative outperformance and retest recent swing highs in coming weeks, as last week index staged a strong comeback after forming a higher base above its 50 days EMA, backed by rejuvenating market breadth (which highlights strength of the market) as currently average 65% stocks of Nifty midcap and small cap indices are above 200 days SMA compared to last week’s reading of ~55%, that bodes well for durability of ongoing up move.

With the global economic crisis looming over the Corona era, India’s economic situation is deteriorating day by day and new stimulus package measures are becoming unavoidable. Sentiment in the Indian stock market improved over the weekend following the prospect of a stimulus package and a positive trend in global markets.

The Reserve Bank has provided ample liquidity to boost the country’s economy amid the Corona epidemic. Yet banks are moving at a slower pace in providing lending. Bankers are confused about how to increase lending and how to handle bad loans.

The Reserve Bank’s October meeting is considered important as it paints a clear picture of the banking sector for the remaining six months of the year. In the coming days, in addition to the loan moratorium, what will be the position of banks in terms of restructuring of loans, the successful arrival of the Covid-19 vaccine and the rise in inflation against the Fed’s balance sheet and the development of the upcoming US presidential election on the international front?

There is a possibility of the Nifty future showing profit booking from near 11517 – 11550 levels in the next two or three sessions as per long-term charts like weekly and monthly timeframe and one should be careful about long-trading positions at market highs. Though momentum looked in favors of the bulls, traders should remain neutral as risk-reward ratios may not be in their favors.

The short-term trend continues to be negative and the next downside levels to be watched out for is around 11433 / 11373 -11360 points and this can be achieved in the short term. The immediate support is placed at 11488 levels. 

Dear Traders…. For the Trading Idea of…

Ø  Nifty Future opened @ 11460 as on 05.10.2020..!!

For Intraday, Nifty Future has resistance at 11474 – 11505 Point; above which other resistance levels are at 11517 – 11533 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 11433 – 11404 Point; below11404 Point, other support levels are at 11373 – 11330 Point.

I am positive for the next bullish trend only above @ 11533 Point but be with the trend. Let the market decide further moves. As we are saying from many days, Buying is suggested in falls only…and it’s still a better strategy in the given Scenario…!!!

Regarding Long term positions, it is preferable to remain cautious now…!!

If Nifty Future crosses @ 11533 Point, again then the upper side target is quite high and it may touch @ 11575 Point in the short term…!!!

Ø Bank Nifty Future opened @ 22319 as on 05.10.2020..!!

For Intraday, Bank Nifty Future has resistance at 22404 – 22474 Point; above which other resistance levels are at 22505 – 22606 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 22272 – 22202 Point; below22202 Point, other support levels are at 22088 – 22008 Point.

I am positive for the next bullish trend only above @ 22606 Point but be with the trend. Let the market decide further moves. As we are saying from many days, Buying is suggested in falls only…and it’s still a better strategy in the given Scenario…!!!

Regarding Long term positions, it is preferable to remain cautious now…!!

If Bank Nifty Future crosses @ 22606 Point, again then the upper side target is quite high and it may touch @ 22676 Point in the short term…!!

Ø Trading Idea for the derivative stocks….

Ø TCS LTD FO @ RS 2580

Positive Trend @ Rs 2580 / 2544 with Stop loss of Rs @ 2525 for the target near @ Rs 2608 – 2626 in short term…..!!!

Ø INDIGO FO @ RS 1277

Positive Trend @ Rs 1277 / 1260 with Stop loss of Rs @ 1244 for the target near @ Rs 1303 – 1313 in short term…..!!!

Ø AURO PHARMA FO @ RS 816

Positive Trend @ Rs 816 / 803 with Stop loss of Rs @ 777 for the target near @ Rs 833 – 840 in short term…..!!!

Ø GRASIM IND. FO @ RS 757

Positive Trend @ Rs 757 / 744 with Stop loss of Rs @ 733 for the target near @ Rs 760 – 774 in short term…..!!!

Ø ACC LTD FO @ RS 1431

Negative Trend @ Rs 1431 / 1447 with Stop loss of Rs @ 1460 for the target near @ Rs 1417 – 1408 in short term…!!!

Ø HCL TECHNO. FO @ RS 830

Negative Trend @ Rs 830 / 848 with Stop loss of Rs @ 860 for the target near @ Rs 818 – 808 in short term…!!!

Ø M & M FO @ RS 616

Negative Trend @ Rs 616 / 634 with Stop loss of Rs @ 640 for the target near @ Rs 606 – 596 in short term…!!!

Ø BIOCON LTD FO @ RS 455

Negative Trend @ Rs 455 / 470 with Stop loss of Rs @ 477 for the target near @ Rs 447 – 440 in short term…!!!

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