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Stock Market Daily Updates: 13 Aug 2020

Uncertainty has increased on the international front due to rising tensions between the U.S. and China and the increase in the number of Covid-19 cases. In such a scenario, the July figure of China's Industrial Production Growth (IIP) will be released on August 14. As the July US retail sales figures are due out on the same day, the Indian stock market will be keeping an eye on them along with the global stock markets.

Photo Credit :

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Dear Trader…

The Sensex and Nifty futures of the Indian stock market saw a volatile trend from the last two days on weak global cues and weak industrial production figures in the first quarter of the current financial year. Along with heavyweights, midcap and small cap stocks also saw sluggishness. Globally, global stock markets softened due to the uncertainty of the consensus of the lawmakers on the huge stimulus package being brought to the U.S. to face the economic challenges facing Corona.

On the fourth day of the week, the Indian stock market started trading with a bullish trend. Funds, high net worth investors, giants, experts traded in stock specific trends and increased the price fluctuations of many stocks.

Indian markers are likely to open positive but it will tracking profit booking pressure in global markets and a slow start to Asian peers. Global news flows and earnings outcome of domestic companies would be key monitorables for today’s trade.

Total Covid-19 confirmed cases worldwide were at 20,292,486 with 741,380 deaths. India reported 6,43,948 active cases of Covid-19 infection and 46,091 deaths while 16,39,599 patients have been discharged, data showed. India's industrial output fell for the fourth straight month, led by weakness across most segments except consumer non-durable goods.

The index of industrial production contracted 16.6% in June over last year, compared to a revised contraction of 34% in May and a record 57.6% slide in April. In the April-June 2020 quarter, the index contracted 35.9%. Manufacturing sector contracted 17.1% YoY. Mining & power output declined 19.8% and 10% YoY, respectively. However, due to the pandemic situation, June IIP numbers are not comparable to the previous data.

India CPI numbers for July are due to be announced yesterday. The domestic consumer prices in India increased 6.09% YoY in June 2020, compared with 6.27% in May 2020. The retail inflation in June had surpassed the RBIs upper limit of 6%. The government has mandated the Indian central bank to keep inflation within the range of 4% with a margin of 2% on either side.

The UK economy contracted 20.4% in the second quarter of 2020, compared to the previous three months, as Corona virus-induced lockdowns hammered activity, according to preliminary figures released on Wednesday.

Friends, The direction of local stock markets in the coming days will be determined by macroeconomic data, quarterly results of companies and global trends. Apart from this, investors will keep an eye on the recent developments related to the Covid-19 epidemic and the increase in cases of infection. In the quarterly season of corporate results for the quarter ending June 2020, today, August 13, 2020, Bharat Petroleum Corporation - BPCL, Eicher Motors, Gail India, Godrej Industries, Grasim Industries, Hero MotoCorp and Power Finance Corporation and on August 14, 2020, Hindalco Industries will keep an eye. Uncertainty has increased on the international front due to rising tensions between the U.S. and China and the increase in the number of Covid-19 cases. In such a scenario, the July figure of China's Industrial Production Growth (IIP) will be released on August 14. As the July US retail sales figures are due out on the same day, the Indian stock market will be keeping an eye on them along with the global stock markets.

Traders should focus on the stock selection as there are enough opportunities across the board, For the past four months, the Nifty is trading in a rising channel formation which also points to an upside movement with its good support of 11272 points and within that period prices have respected its lower band almost three times and successfully rallied higher.

The short-term should initiate long positions only on a strong close above 11373 points, whereas intraday traders can consider shorting below 11272 points and look for modest targets of 11202 to 11188 points.

We expect some consolation at the current level with time-wise correction. A breakdown below 11272 can trigger a further supply to 11202 points, a breach of which will open the gate for 11188 -11101 points and resistance is coming near 11373 points

Dear Trader…For the Trading Idea of…

Nifty Future opened @ 11338 as on 13.08.2020

For Intraday, Nifty Future has resistance at 11360 – 11388 Point; above which other resistance levels are at 11404 – 11414 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 11303 – 11288 Point; below 11288 Point, other support levels are at 11260 – 11230 Point.

I am positive for the next bullish trend only above @ 11388 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 @ 11388 Point, again then the upper side target is quite high and it may touch @ 11414 Point in the short term 

Bank Nifty Future opened @ 22401 as on 13.08.2020

For Intraday, Bank Nifty Future has resistance at 22474 – 22505 Point; above which other resistance levels are at 22565 – 22606 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 22360 – 22303 Point; below 22303 Point, other support levels are at 22220 – 22120 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

Trading Idea for the derivative stocks….

TCS LTD FO @ RS 2280

Positive Trend @ Rs 2280 / 2260 with Stop loss of Rs @ 2240 for the target near @ Rs 2303 - 2310 in short term 

BHARAT PETRO FO @ RS 422

Positive Trend @ Rs 422 / 414 with Stop loss of Rs @ 404 for the target near @ Rs 433 - 440 in short term

INFOSYS LTD FO @ RS 960

Positive Trend @ Rs 960 / 950 with Stop loss of Rs @ 940 for the target near @ Rs 984 - 990 in short term 

LARSEN FO @ RS 956

Positive Trend @ Rs 956 / 940 with Stop loss of Rs @ 933 for the target near @ Rs 973 - 980 in short term

DIVIS LAB FO @ RS 3144

Negative Trend @ Rs 3144 / 3160 with Stop loss of Rs @ 3177 for the target near @ Rs 3130 – 3108 in short term

AURO PHARMA FO @ RS 923

Negative Trend @ Rs 922 / 930 with Stop loss of Rs @ 939 for the target near @ Rs 909 – 898 in short term 

HCL TECHNO FO @ RS 722

Negative Trend @ Rs 722 / 733 with Stop loss of Rs @ 740 for the target near @ Rs 708 – 700 in short term 

CENTURY TEXT FO @ RS 311

Negative Trend @ Rs 311 / 320 with Stop loss of Rs @ 327 for the target near @ Rs 298 – 290 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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