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Stock Market Daily Updates: 16 Sep 2020

The short-term trend of Nifty future is range-bound with positive bias. Renewed buying enthusiasm could only occur above 11606 point…..

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Dear Trader…

The Nifty future is moving in a broader range and has witnessed selling pressure consistently at the highs. It is going to be crucial to watch the market behavior at the hurdle of 11606 points. Traders are seeing noticeable buying across the all sector during this consolidation phase and it’s indeed a positive sign. However, the participation of the banking is critical for any directional move in the index. Consider the prevailing scenario; Traders should keep a close eye on the outcome of the US Fed meet for cues.

After the capital market regulator SEBI last Friday made it mandatory for mutual funds to have a portfolio of 25% in large caps, 25% in mid caps and 25% in small caps, the decision was taken in response to various changes in the mutual funds. Unit holders have a choice of rebalancing their portfolios in multicap schemes, as well as the choice of unit holders to switch over to other schemes and merge multi-cap schemes with large-cap schemes or to convert multi-cap schemes into other scheme categories.

Friends, The small-cap index of the Bombay Stock Exchange (BSE) on Monday witnessed the biggest intra-day rise in the last five months on Monday following new Sebi regulations on multicap funds. Earlier, on April 7, 2020, the BSE Smallcap Index had risen by 4.3%. Last weekend, market regulator SEBI announced a detailed portfolio structure for multicap funds. Accordingly, in such schemes, the funds will be required to keep 25% portfolio of large cap, midcap and small cap.

This new structure will have to be implemented in the existing schemes by January 2021. Behind these reports, the Mumbai Stock Exchange (BSE) has seen a surge in trading in selected small cap stocks from the very beginning today. Stocks in the sector will continue to move forward in the near future.

Indian stock markets saw the expected rally. At the local level, favorable inflation data and the expectation to stay below it and the increase in retail sales in the automobile sector in August with the opening of the lockdown, increasing demand for two-wheelers and four-wheelers and a good monsoon are also expected to increase. The Indian stock market closed with a rebound.

Tensions on the border between India and China remain high. Despite last week's foreign minister-level talks between the two countries, the border will remain under constant watch due to short-term uncertainty.

In the last couple of weeks, banking, pharma and tech stock came under selling pressure. The sharp recover rally in indicates a pullback rally likely to continue in the short run.

The short-term trend of Nifty future is range-bound with positive bias. Renewed buying enthusiasm could only occur above 11606 point and that is likely to pull the market towards 11636 levels in a quick period of time. Important lower supports to be watched at 11474 and a breach below this support could trigger more weakness in the near term.

Dear Traders…. For the Trading Idea of…

Nifty Future opened @ 11518 as on 16.09.2020

For Intraday, Nifty Future has resistance at 11575 – 11606 Point; above which other resistance levels are at 11616 – 11630 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 11505 – 11474 Point; below11474 Point, other support levels are at 11474 – 11430 Point.

I am positive for the next bullish trend only above @ 11606 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 @ 11606 Point, again then the upper side target is quite high and it may touch @ 11630 Point in the short term

Bank Nifty Future opened @ 22538 as on 16.09.2020..!!

For Intraday, Bank Nifty Future has resistance at 22606 – 22636 Point; above which other resistance levels are at 22676 – 22707 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 22505 – 22474 Point; below22474 Point, other support levels are at 22404 – 22373 Point.

I am positive for the next bullish trend only above @ 22707 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 @ 22707 Point, again then the upper side target is quite high and it may touch @ 22777 Point in the short term.

Trading Idea for the derivative stocks….

DIVIS LAB FO @ RS 3202

Positive Trend @ Rs 3202 / 3180 with Stop loss of Rs @ 3170 for the target near @ Rs 3232 - 3240 in short term

RELIANCE IND. FO @ RS 2318

Positive Trend @ Rs 2318 / 2308 with Stop loss of Rs @ 2303 for the target near @ Rs 2337 - 2350 in short term

KOTAK BANK FO @ RS 1323

Positive Trend @ Rs 1323 / 1313 with Stop loss of Rs @ 1303 for the target near @ Rs 1344 - 1350 in short term

ACC LTD FO @ RS 1384

Positive Trend @ Rs 1384 / 1374 with Stop loss of Rs @ 1370 for the target near @ Rs 1404 - 14174 in short term

HDFC LTD FO @ RS 1767

Negative Trend @ Rs 1767 / 1777 with Stop loss of Rs @ 1788 for the target near @ Rs 1753 – 1740 in short term

INDIGO FO @ RS 1351

Negative Trend @ Rs 1351 / 1366 with Stop loss of Rs @ 1374 for the target near @ Rs 1333 – 1320 in short term

INDUSIND BANK FO @ RS 641

Negative Trend @ Rs 641 / 650 with Stop loss of Rs @ 657 for the target near @ Rs 626 – 620 in short term.

SUN PHARMA FO @ RS 511

Negative Trend @ Rs 511 / 523 with Stop loss of Rs @ 530 for the target near @ Rs 498 – 490 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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