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Stock Market Daily Updates: 25 Sep 2020

It is the beginning of a new series, If the Nifty future sustains below 10888 point then any small bounce could be sold for further weakness towards 10808-10777 point while on the upside, the medium-term hurdle is shifting to 11939 -11008 point.

Photo Credit :

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Dear Trader…

The Indian stock market traded negative due to number of corona cases on the global front increasing and being considered for re-lockdown. The bears remained in control of the September series and pushed the benchmark indices lower. Investors lost nearly Rs 4 lakh crore in terms of market capitalization on the BSE. The average market capitalization of the BSE-led companies fell from Rs 152.71 lakh cr recorded on 23 September to Rs 148.79 lakh cr on September 24.

At the local level, India's first major agricultural reform bill was passed in both Houses of Parliament amid opposition, but now a bill to radically change the labor law has been passed, but the economic reforms have had a negative impact on the market instead of a positive one and Amidst the current uncertainty in the market, the Indian stock market today witnessed heavy profit booking in futures and options contracts due to the September expiry.

It is worth mentioning that there is no solution between the growing cases of Corona virus and the lifestyle so as investor concerns RBI Governor Shaktikant Das warns shareholders in August, that the stock market may not look like the real economy, which could lead to further declines. So there was caution among global investors. The looming uncertainty over the stimulus package in the US, combined with the issue of rising COVID cases worldwide, has raised concerns over the economic recovery. And, it may deteriorate further if the virus situation results in partial lockdown.

Friends, the September series was negative for derivatives traders. Pharma and IT stocks showed strength in September but banking sentiment was weak due to high weightage in the financial sector. IT stocks have been outperformers in the market despite the softness that started last week and they have supported the market and the pharma sector has also outperformed. 

The concern from global markets, with elections approaching in the US and a renewed round of Corona in Europe, there is a high possibility of a lockdown. The only hope for a correction in the market is the flow of liquidity. Given strong liquidity from foreign and domestic funds in the coming days, the market is likely to rebound after the correction.

The USD-INR spot has also exceeded the resistance of 93.8, which indicates further weakness towards 94.3-94.5. This is likely to add to selling pressure in financials and NBFCs in the coming sessions. 

We expect underperformance from financial, commodities and infra sectors and advice to stay light on positions as the index is trading near crucial support levels, so a technical bounce could be in the offing. Traders can buy their favorite stocks on dip only since it is the beginning of a new series, If the Nifty future sustains below 10888 point then any small bounce could be sold for further weakness towards 10808-10777 point while on the upside, the medium-term hurdle is shifting to 11939 -11008 point.

It would be prudent of traders to wait for clarity before jumping into a trade while investors should keep their shopping list handy to accumulate fundamentally sound stocks on dips only.

Dear Traders…. For the Trading Idea of…

Nifty Future opened @ 10906 as on 25.09.2020

For Intraday, Nifty Future has resistance at 10939 – 10973 Point; above which other resistance levels are at 10988 – 11008 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 10888 – 10848 Point; below10848 Point, other support levels are at 10833 – 10808 Point.

I am positive for the next bullish trend only above @ 11008 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 @ 11008 Point, again then the upper side target is quite high and it may touch @ 11088 Point in the short term

Bank Nifty Future opened @ 20710 as on 25.09.2020..!!

For Intraday, Bank Nifty Future has resistance at 20777 – 20808 Point; above which other resistance levels are at 20838 – 20888 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 20606 – 20575 Point; below20575 Point, other support levels are at 20505 – 20474 Point.

I am positive for the next bullish trend only above @ 20888 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 @ 20888 Point, again then the upper side target is quite high and it may touch @ 20909 Point in the short term

Trading Idea for the derivative stocks….

RELIANCE IND. FO @ RS 2204

Positive Trend @ Rs 2204 / 2188 with Stop loss of Rs @ 2173 for the target near @ Rs 2222 - 2240 in short term

HDFC LTD FO @ RS 1645

Positive Trend @ Rs 1645 / 1626 with Stop loss of Rs @ 1616 for the target near @ Rs 1673 - 1680 in short term

LUPIN LTD FO @ RS 990

Positive Trend @ Rs 990 / 973 with Stop loss of Rs @ 960 for the target near @ Rs 1004 - 1012 in short term

GLENMARK PHARMA FO @ RS 464

Positive Trend @ Rs 464 / 453 with Stop loss of Rs @ 444 for the target near @ Rs 470 - 477 in short term

KOTAK BANK FO @ RS 1251

Negative Trend @ Rs 1251 / 1273 with Stop loss of Rs @ 1280 for the target near @ Rs 1236 – 1223 in short term

LARSEN LTD FO @ RS 861

Negative Trend @ Rs 861 / 878 with Stop loss of Rs @ 888 for the target near @ Rs 848 – 833 in short term

BHARTI AIRTEL FO @ RS 430

Negative Trend @ Rs 443 / 450 with Stop loss of Rs @ 450 for the target near @ Rs 417 – 406 in short term

ICICI BANK FO @ RS 342

Negative Trend @ Rs 342 / 353 with Stop loss of Rs @ 360 for the target near @ Rs 336 – 330 in 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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