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Stock Market Daily Updates: 05 Aug 2020

The Nifty future strongly defended 200-DMA and gave a strong positive signal. the rally could be extended to 11202 – 11230 points in the coming sessions and also positive action may come in energy, banks, consumer durables, healthcare…..

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Dear Trader…

The Indian stock market started with a rally, the bulls returned in force to push the benchmark indices above crucial resistance levels on August 4.Ahead of the Reserve Bank of India's lending policy review meeting, On the global front, the White House's announcement that the US presidential election will be held in November led to a rise in the dollar index and a fall in gold prices. Crude oil was also softening following the economic downturn caused by the coronavirus.

Friends, Global cues were also mostly positive, and aided the markets, following better US manufacturing data and also positive action was seen in energy, banks, consumer durables, healthcare, and oil & gas stocks while mild profit-booking was visible in IT space Private Banks and RIL supported the gains in the benchmark indices.

The lockdown began on March 25 in India. The lockdown began to ease in May. This led to an improvement in demand. However, the corona case in some states was again shut down locally due to renewed growth. There was a sign of recovery in economic activity in rural areas. However, local lockouts have slowed growth there as well. Indian banks and non-banking finance companies have also seen an unexpected slowdown in growth in July due to mini-lockdowns imposed by some states. Most companies have seen a decline in lending and transactions this month due to renewed growth in the Covid-19 case.

Rating agency Icara has also slashed its GDP estimate for India for the fiscal year 2020-21 from -5% to -9.5%. In the coming days, factors including the Reserve Bank's policy review meeting, quarterly results of companies, etc. are likely to determine the movement of the Indian stock market. The results of the three-day meeting of the Reserve Bank's policy committee will be announced on August 8, as well as the growing cases of Covid-19 and US-China relations with global markets to keep an eye on the Indian stock market.

The index negated the formation of lower high - lower lows of the last three trading sessions which is a positive for the bulls. Major trend of the index is positive and emergence of buying after the dips that the bulls could be back on track,

India VIX fell by 5.97 % to 23.67 levels. Decline in VIX from its recent bounce of 25.69 suggests that the bulls are using any decline as a buying opportunity and overall trend could remain bullish,

The Nifty future strongly defended 200-DMA and gave a strong positive signal. the rally could be extended to 11202 – 11230 points  in the coming sessions if the index holds 11008 points, Traders should remain cautious with a stop below 10909 points on long-side bets as a breach on a closing basis could strengthen the bearish sentiment. As per this pattern, the Nifty has the potential of moving towards its recent swing high of 11340 points in the near term.

Nifty Future opened @ 11131 as on 05.08.2020

For Intraday, Nifty Future has resistance at 11173 – 11188 Point; above which other resistance levels are at 11202 – 11230 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 11101 – 11088 Point; below 11088 Point, other support levels are at 11033 – 11008 Point.

I am positive for the next bullish trend only above @ 11202 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 @ 11202 Point, again then the upper side target is quite high and it may touch @ 11230 Point in the short term

Bank Nifty Future opened @ 21699 as on 05.08.2020

For Intraday, Bank Nifty Future has resistance at 21777 – 21833 Point; above which other resistance levels are at 21909 – 21970 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 21606 – 21474 Point; below 21474 Point, other support levels are at 21404 – 21272 Point.

I am positive for the next bullish trend only above @ 21909 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 @ 21909 Point, again then the upper side target is quite high and it may touch @ 22008 Point in the short term 

Prediction on Stock specific Movement as on 05.08.2020

RELIANCE FO @ RS 2177

Positive Trend @ Rs 2177 / 2160 with Stop loss of Rs @ 2147 for the target near @ Rs 2202 - 2220 in short term 

LUPIN FO @ RS 937

Positive Trend @ Rs 937 / 919 with Stop loss of Rs @ 909 for the target near @ Rs 953 - 960 in short term

AURO PHARMA FO @ RS 874

Positive Trend @ Rs 874 / 860 with Stop loss of Rs @ 853 for the target near @ Rs 888 - 898 in short term

LARSEN FO @ RS 925

Positive Trend @ Rs 925 / 909 with Stop loss of Rs @ 903 for the target near @ Rs 937 - 950 in short term

KOTAK BANK FO @ RS 1340

Negative Trend @ Rs 1340 / 1353 with Stop loss of Rs @ 1360 for the target near @ Rs 1323 – 1309 in short term

HCL TECHNO FO @ RS 697

Negative Trend @ Rs 696 / 707 with Stop loss of Rs @ 717 for the target near @ Rs 686 – 680 in short term

INDUSIND BANK FO @ RS 507

Negative Trend @ Rs 505 / 517 with Stop loss of Rs @ 523 for the target near @ Rs 496 – 488 in short term 

GLENMARK PHARMA FO @ RS 452

Negative Trend @ Rs 450 / 460 with Stop loss of Rs @ 474 for the target near @ Rs 434 – 433 in short term

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Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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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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