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Stock Market Daily Updates: 19 Nov 2020

The upside rally could be testing all the way up to whole new levels in the upcoming trading zone as far as levels are concerned, immediate resistance is placed around 13003 - 13013 levels, Alternatively, if the market struggles to break the resistance level, then it might retest the same and revise the trend to bearish mode whereas support is placed around 12909 and 12888 levels. Key strong support holds near 12808 levels.

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Dear Trader…

For the second consecutive week, the Nifty and Bank Nifty continued to out-perform broader indices and creating a new historical high on the back of positive sentiment in global markets and massive buying by FIIs, besides, on the impact of the global corona vaccine announcement and the removal of almost all uncertainties from the US to Bihar when Nitish Kumar became Bihar's chief minister again with a NDA majority at the local political level.

Private Banks continued to do well whereas after profit booking in PSU banks, fresh accumulation was again seen at lower levels. OI addition was seen as the series had started with lower OI base.

The central governments had to impose a lockdown across the country due to the corona crisis. The government's decision brought economic activity to a standstill and the economy plummeted. Positive sentiment was further strengthened by the government's announcement of a self-sufficient India 3.0 stimulus package last week.

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. 

Amid the Corona crisis, three major economic packages have been announced, 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. 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.

India VIX was down by 3.43 percent from 19.13 to 19.12 levels. Volatility has significantly cooled down but needs to continue at lower zones to ride the momentum with a higher market base.

We feel accumulation at lower levels would keep the overall trend of the index positive as long as Nifty future sustains above 12808 levels a higher target of 13013 levels cant’ be ruled out but this hyper active rally from the lows of 11535 levels in just 13 sessions is certainly a cause for concern as this kind of vertical moves certainly lead to sharp sell-off so long side traders are strictly advised to maintain a tight stop near 12808 levels on a closing basis.

We reiterate that the momentum is strongly gripped by bulls however the indicators are now in deep overbought territory hence we may see in between consolidation or correction. We are just waiting for the beginning of a downtrend and hence any such rise should be taken as a profit booking opportunity.

The upside rally could be testing all the way up to whole new levels in the upcoming trading zone as far as levels are concerned, immediate resistance is placed around 13003 - 13013 levels, 

Alternatively, if the market struggles to break the resistance level, then it might retest the same and revise the trend to bearish mode whereas support is placed around 12909 and 12888 levels. Key strong support holds near 12808 levels.

Dear Traders…. For the Trading Idea of…

  • Nifty Future closed @ 12957 as on 18.11.2020

Nifty Future has resistance at 13003 – 13033 Point; above which other resistance levels are at 13088 – 13103 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 12909 – 12888 Point; below12888 Point, other support levels are at 12833 – 12808 Point.

I am positive for the next bullish trend only above @ 13033 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 @ 13033 Point, again then the upper side target is quite high and it may touch @ 13088 Point in the short term

  • Bank Nifty Future closed @ 29756 as on 18.11.2020

Bank Nifty Future has resistance at 29808 – 29888 Point; above which other resistance levels are at 29933 – 30033 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 29676 – 29606 Point; below29606 Point, other support levels are at 29474 – 29303 Point.

I am positive for the next bullish trend only above @ 30033 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 @ 30033 Point, again then the upper side target is quite high and it may touch @ 30303 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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