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Stock Market Daily Updates: 20 Aug 2020

I expect most of the segments to return to normal by next November but as the stock market is always moving in the future, it has already discounted what will happen in the next two months. Due to this, it will not be a surprise if the market does not react if data indicating economic recovery comes from October or November.

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Dear Trader…

Indian markets saw heavy profit-taking at higher levels with maintained volatility in stock-specific on 20th August 2020. Indian benchmark share indices opened lower on tracking weakness in global peers due to in the early deals following Wall Street's late session retreat after the Federal Reserve warned the US economy faced a highly uncertain path to recovery from the corona virus-induced downturn. Market sentiment had been bullish up until the Fed's comments.

The Indian stock market outperformed the global stock market in August. It has had a positive impact on the Indian stock market as new reforms are being made by the state governments to improve business sentiment along with the positive impact of one reform measure after another being taken by the government.

Indian stock markets rallied yesterday on the back of strength in futures markets in the US against a softening in Asian markets as tensions escalated as US controls on Huawei resumed between the US and China. With good rains across the country expected to accelerate the recovery of the economy this year due to high growth in the agricultural sector and positive reports of vaccines and drugs for coronavirus in various countries easing the lockdown, industrial-economic activity in the country is expected to pick up again in the coming days. Was closing with a bounce.

Friends, we’re seeing rotational buying on the sectoral front and almost all the sectors are contributing to the move. However, the decisiveness is still missing and thus we suggest traders choose their bets wisely. political tensions between the US and China and the uncertainty of the stimulus package by the US, the Indian stock market has been on a volatile trend. Investors are optimistic that the government will control the situation by increasing spending in the wake of the lockdown.

The good progress of monsoon in the country has also fueled the rise in stocks. The current recovery in the market is due to the increased flow towards emerging markets along with the weakness of the dollar index.

The month of August is also seeing FPI net buyers. Because of this, the market is trying to continue to move upwards despite being in a narrow range.

I expect most of the segments to return to normal by next November. But as the stock market is always moving in the future, it has already discounted what will happen in the next two months. Due to this, it will not be a surprise if the market does not react if data indicating economic recovery comes from October or November. The coming days will see a pick-up in stocks as liquidity improves and valuations ease, and this trend will continue in the near future.

The Nifty future trend for the series remains volatile with support seen at 11202 points. Broad-based participation is seen with midcap stocks outperforming. We strongly believe that book some profit on every high range of Nifty future.

We know that the undertone remains positive with any meaningful correction being a buying opportunity but traders may caution. In Banking, Mid-cap, auto ancillary, pharma and FMCG, Metals and IT expected to witness some profit booking.

Dear Traders…. For the Trading Idea of…

Nifty Future opened @ 11298 as on 20.08.2020

For Intraday, Nifty Future has resistance at 11313 – 11330 Point; above which other resistance levels are at 11347 – 11360 Point with highly Volatile Trend

Nifty Future has Downside support levels are at 11273 – 11260 Point; below 11260 Point, other support levels are at 11232 – 11202 Point.

I am positive for the next bullish trend only above @ 00000 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 @ 11360 Point, again then the upper side target is quite high and it may touch @ 11373 Point in the short term 

Bank Nifty Future opened @ 22022 as on 20.08.2020

For Intraday, Bank Nifty Future has resistance at 22088 – 22120 Point; above which other resistance levels are at 22202 – 22288 Point with highly Volatile Trend.

Bank Nifty Future has Downside support levels are at 21970 – 21909 Point; below 21909 Point, other support levels are at 21888 – 21808 Point.

I am positive for the next bullish trend only above @ 22202 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 @ 22288 Point, again then the upper side target is quite high and it may touch @ 22303 Point in the short term

Trading Idea for the derivative stocks….

LUPIN LTD FO @ RS 983

Positive Trend @ Rs 983 / 970 with Stop loss of Rs @ 960 for the target near @ Rs 997 - 1008 in short term 

GLANMARK PHARMA FO @ RS 478

Positive Trend @ Rs 478 / 460 with Stop loss of Rs @ 450 for the target near @ Rs 484 - 490 in short term 

HDFC FO @ RS 1796

Positive Trend @ Rs 1796 / 1780 with Stop loss of Rs @ 1773 for the target near @ Rs 1813 - 1830 in short term 

RBL BANK FO @ RS 183 

Positive Trend @ Rs 183 / 178 with Stop loss of Rs @ 173 for the target near @ Rs 189 - 193 in short term 

DIVIS LAB FO @ RS 3188

Negative Trend @ Rs 3188 / 3208 with Stop loss of Rs @ 3220 for the target near @ Rs 3157 – 3140 in short term 

ACC LTD FO @ RS 1425

Negative Trend @ Rs 1425 / 1440 with Stop loss of Rs @ 1447 for the target near @ Rs 1414 – 1408 in short term 

AURO PHARMA FO @ RS 862

Negative Trend @ Rs 862 / 878 with Stop loss of Rs @ 888 for the target near @ Rs 848 – 840 in short term 

TECH MAHINDRA FO @ RS 723 

Negative Trend @ Rs 723 / 733 with Stop loss of Rs @ 740 for the target near @ Rs 709 – 703 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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