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Stock Market Daily Updates: 13 Oct 2020

The Nifty future has rallied 1222 points in 10 sessions (low 10790) which hauled daily stochastic oscillator in overbought territory.

Photo Credit : PTI

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Dear Trader…

The Nifty rallied more than 1222 points in the last five weeks with the addition of 50% open interest in the current series. It is evident that aggressive long position had formed. Friends, we expect the ongoing positive momentum to continue in the banking index with declines remaining a buying opportunity but as the Nifty future witnessed a mild sell-off from the critical psychological resistance point with a high of 12008 levels and formed a small-bodied bearish candle on the daily charts.

A number of stock-specific incentives such as Reliance Industries, TCS and Wipro's buyback offer, company acquisition by Infosys, incentive performance of other IT companies and optimism for improvement in Corporate India's performance for the quarter ended September and RBI last week as the stimulus package announced by Finance Minister Nirmala Sitharaman left the markets unimpressed.

Continued buying amid modest softening in stocks has seen a steady improvement in the Indian stock market. The country's economic situation is weak in the eyes of the world's top institutions, including the World Bank, as well as the RBI. But most of the companies have now reached pre-lockdown operations and the Indian stock market has been steadily rising for the past three to four days despite market breadth being negative, with estimates of good rains in many parts of the country having a positive impact on the agro-rural economy.

Foreign portfolio investors have invested an estimated Rs 1086 crore in the Indian stock market so far in October, on the back of improving GST collection, boosting economic activity and other encouraging factors, including positive global signals. In September, FPIs had a net seller of Rs 3419 crore. Domestic and global factors contributed to the net inflows in the month of October. And, better-than-expected performance, GST collection and normalization of the economy are helping to make India an attractive investment destination.

In addition, global markets are performing at pre covid-19 levels. It has also boosted investor expectations. In the coming days, the Indian stock market, along with global markets, will be keeping a close eye on factors such as FPI inflows, the rising corona virus and the development of the upcoming US presidential election on the global front.

The Nifty future has rallied 1222 points in 10 sessions (low 10790) which hauled daily stochastic oscillator in overbought territory. Thus, possibility of temporary breather at 12088 - 12120 range cannot be ruled out. However, we believe, such breather should not be construed as negative, instead dips should be capitalized as an incremental buying opportunity in quality stocks amid ongoing Q2FY21 result season.

India VIX was up by 3.67 percent from 20.38 to 21.12 levels. Despite volatility, the option data indicated that the Nifty future could see an immediate trading range of 11808 -12088 level.

The Nifty future has to continue to hold above 12008 point to witness an up move towards 12088 then 12120 levels while on the downside key support exists at 11880 then 11808 levels.

Dear Traders…. For the Trading Idea of…

Ø  Nifty Future opened @ 11921 as on 13.10.2020..!!

For Intraday, Nifty Future has resistance at 11949 – 11988 Point; above which other resistance levels are at 12008 – 12033 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 12909 – 11888 Point; below11888 Point, other support levels are at 11860 – 11833 Point.

I am positive for the next bullish trend only above @ 12008 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 @ 12008 Point, again then the upper side target is quite high and it may touch @ 12033 Point in the short term...!!!

ØBank Nifty Future opened @ 23699 as on 13.10.2020..!!

For Intraday, Bank Nifty Future has resistance at 23737 – 23777 Point; above which other resistance levels are at 23808 – 23888 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 23676 – 23606 Point; below23606 Point, other support levels are at 23575 – 23505 Point.

I am positive for the next bullish trend only above @ 23888 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 @ 23888 Point, again then the upper side target is quite high and it may touch @ 23909 Point in the short term...!!

Ø Trading Idea for the derivative stocks….

Ø MUTHOOT FIN. FO @ RS 1140

Positive Trend @ Rs 1140 / 1127 with Stop loss of Rs @ 1117 for the target near @ Rs 1173 - 1180 in short term…..!!!

Ø INFOSYS FO @ RS 1131

Positive Trend @ Rs 1131 / 1118 with Stop loss of Rs @ 1108 for the target near @ Rs 1147 – 1160 in short term…..!!!

Ø HCL TECHNO. FO @ RS 868

Positive Trend @ Rs 868 / 853 with Stop loss of Rs @ 844 for the target near @ Rs 883 - 890 in short term…..!!!

Ø AURO PHARMA FO @ RS 836

Positive Trend @ Rs 836 / 823 with Stop loss of Rs @ 816 for the target near @ Rs 848 - 860 in short term…..!!!

Ø INDIGO FO @ RS 1397

Negative Trend @ Rs 1397 / 1414 with Stop loss of Rs @ 1420 for the target near @ Rs 1380 – 1363 in short term...!!!

Ø CIPLA LTD FO @ RS 814

Negative Trend @ Rs 814 / 823 with Stop loss of Rs @ 833 for the target near @ Rs 808 – 797 in short term...!!!

Ø GRASIM IND. FO @ RS 757

Negative Trend @ Rs 757 / 773 with Stop loss of Rs @ 780 for the target near @ Rs 744 – 740 in short term...!!!

Ø AXIS BANK FO @ RS 465

Negative Trend @ Rs 465 / 477 with Stop loss of Rs @ 480 for the target near @ Rs 456 – 450 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.


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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