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Nifty Index Breaches 12808, It Can Slip To 12770 To 12707

Traders can retain a positive stance as long as the Nifty future sustains above 12808 and the index's strength will be confirmed on a close above 13003 levels, in such a scenario, the upswing may initially get extended towards 13130 levels. On the downside, if the Nifty index breaches 12808, then it can slip to the 12770 to 12707 levels. Broadly, the trend remains up but a consolidation or minor correction from current level cannot be ruled out. Hence, trader should adopt buy on decline strategy.

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Dear Trader…

The stock market is currently witnessing a new historic boom in the steady influx of foreign funds, but there is no denying that the boom is now at a risky stage. According to the report, we are currently in a challenging time. Investors should be cautious considering being in the stage.

Friends, India VIX were marginally up by 0.24 percent from 19.57 to 19.61 levels. Due to the corona crisis, the central government had to impose a lockdown across the country and economic activity came to a standstill and the economy went into a complete recession.

Stocks came under heavy pressure following the Supreme Court hearing on the moratorium case in addition to the growing cases of Corona virus after the Indian stock market continued to rebound, but the market reacted negatively to the prospect of increasing burden on the some specific sectors.

Friends, With the new round of Corona epidemics around the world, the Government of India was forced to announce a self-sufficient India 3.0 stimulus package in an effort to get the global economy back on track. The economy is said to be in a historic technical downturn and GDP growth was negative at 8.6% for the second consecutive quarter ending September 2020.

Three major economic packages have been announced amid the Corona crisis, the positive effects of which are now being seen. Now in terms of GDP, all the rating agencies have predicted a faster-than-expected recovery on the GDP growth forecast for the next quarter.

India's GDP fell sharply by 23.9% in the first quarter of the current financial year due to the lockdown. This was the biggest decline in the modern history of India. But in the midst of all this, the central government was constantly making decisions for a speedy recovery in the economy. 

Global research firm and rating agency Goldman Sachs has revised India's economic growth forecast for fiscal year 2020-21 to -10.3% and the Indian economy is projected to grow the fastest in the world with a 13% improvement in GDP in the next fiscal year 2021-22. Rating agency Morgan Stanley has claimed in a report that the Indian economy has received good support in the second quarter of this financial year and could lead to India's GDP growth rate reaching 9.8% in 2021.

The Reserve Bank of India's warning indicator for the economy is not to ignore the report of the economy entering a technical recession in any way. The RBI's figures show an increase in operating profit through cost-cutting measures despite a decline in sales by companies. Vehicle sales figures came in October with an increase in liquidity in banking. 

If this uptrend is maintained, the Indian economy will return to growth in the October-December quarter. However with the risk of price pressures there is an extremely large risk to global growth from the second wave of corona virus outbreaks.

The economy has declined by 24% from April to June, which cannot be ignored by any means and this chitchat of the economy is also a sign of caution for the Indian stock market.

Traders can retain a positive stance as long as the Nifty future sustains above 12808 and the index's strength will be confirmed on a close above 13003 levels, in such a scenario, the upswing may initially get extended towards 13130 levels.

On the downside, if the Nifty index breaches 12808, then it can slip to the 12770 to 12707 levels. Broadly, the trend remains up but a consolidation or minor correction from current level cannot be ruled out. Hence, trader should adopt buy on decline strategy.

Dear Traders…. For the Trading Idea of…

  • Nifty Future closed @ 12871 as on 20.11.2020

Nifty Future has resistance at 12888 – 12909 Point; above which other resistance levels are at 12919 – 12933 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 12808 – 12777 Point; below12777 Point, other support levels are at 12733 – 12707 Point.

I am positive for the next bullish trend only above @ 12933 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 @ 12909 Point, again then the upper side target is quite high and it may touch @ 12933 Point in the short term

  • Bank Nifty Future closed @ 29244 as on 20.11.2020

Bank Nifty Future has resistance at 29373 – 29505 Point; above which other resistance levels are at 29575 – 29707 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 29090 – 28888 Point; below28888 Point, other support levels are at 28787 – 28606 Point.

I am positive for the next bullish trend only above @ 29707 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 @ 29707 Point, again then the upper side target is quite high and it may touch @ 29777 Point in the short term

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Nikhil Bhatt | Research Analyst - SEBI

The author is a well established entrepreneur having a more than 16 years of experience in the field of stock market and financial management.

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