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Stock Market Daily Updates: 26 Aug 2020

Technically, the Nifty future has been trading with its strong support of 21-Day Moving Average, which shows a positive trend. At the present level, the downside support comes at 11414 – 11373 points while upside resistance comes at 11505 – 11533 points.

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Dear Trader…

With the monsoon being very successful in India this year, specific stocks rise all day, with stocks buying all-round in anticipation of faster growth after the country's economy emerged from the brink of collapse due to higher growth in agriculture this year. After the pharma, cement, FMCG, auto and metal stocks, the recent buoyancy in the banking stocks are helping the index to inch higher while other heavyweights are seeing a profit booking on every rise.

Global markets were bullish on hopes of worldwide availability for corona virus treatment and positive development of China's vaccine. With US President Donald Trump taking a lukewarm stance on US companies doing business with Chinese companies in anticipation of improving US-China relations and rising global crude oil prices amid a global industrial recovery, Indian stock markets also rallied. 

Indian markets exhibited characteristic volatility, trading undecidedly, before ending flat with a slight positive bias. This was in spite of positive global cues after the US and China reaffirmed their commitment to a previous trade deal and progress in virus vaccine development.

Markets opened almost in a volatile trading session initially, the Nifty future opened on a firm note, tracking positive global cues but profit-taking at the higher levels trimmed the gains.

Friends, the decision by the government to ease the payment of GST has had a positive impact on its sentiment and the local stock market has reached a six-month high on the back of a global stock market rally. Investors' capital is back at February levels. It is now only an estimated Rs 3 lakh crore away from the top market cap in January. The benchmark also indicates a decline of less than 10% from the top, indicating that the market is out of recession. In addition, the Nifty has remained below the VIX 20 and is now out of the recessionary grip. Indications that the government has made every effort to mitigate the effects of Covid-19 at the local level have also boosted the confidence of traders in the market and increased control over Corona's case globally has also boosted sentiment. Now the market will keep an eye on what package the US is announcing to fight Covid-19 in the coming days. He hoped that the currency and the stock market would improve further if the dollar index fell further before the US election.

We suggest traders should remain cautious and keep booking profits whenever possible and continuing follow with the “buy-on-dips” approach technically; the Nifty future has been trading with its strong support of 21-Day Moving Average, which shows a positive trend. At the present level, the downside support comes at 11373 – 11303 points while upside resistance comes at 11533 – 11606 points, Development related to economic activity, US' new home sales data and US-China relationship will remain key factors for the market.

Dear Traders…. For the Trading Idea of…

Nifty Future opened @ 11480 as on 26.08.2020

For Intraday, Nifty Future has resistance at 11505 – 11533 Point; above which other resistance levels are at 11547– 11560 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 11414 – 11404 Point; below11404 Point, other support levels are at 11373 – 11360 Point.

I am positive for the next bullish trend only above @ 11560 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 @ 11505 Point, again then the upper side target is quite high and it may touch @ 11533 Point in the short term

Bank Nifty Future opened @ 23150 as on 26.08.2020

For Intraday, Bank Nifty Future has resistance at 23202 – 23272 Point; above which other resistance levels are at 23303 – 23373 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 23008 – 22909 Point; below22909 Point, other support levels are at 22860 – 22808 Point.

I am positive for the next bullish trend only above @ 23373 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 @ 23373 Point, again then the upper side target is quite high and it may touch @ 23404 Point in the short term.

Trading Idea for the derivative stocks….

DIVIS LAB FO @ RS 3233

Positive Trend @ Rs 3233 / 3208 with Stop loss of Rs @ 3190 for the target near @ Rs 3260 - 3273 in short term

ACC LTD FO @ RS 1400

Positive Trend @ Rs 1400 / 1388 with Stop loss of Rs @ 1380 for the target near @ Rs 1417 - 1430 in short term

MUTHOOT FINANCE FO @ RS 1196

Positive Trend @ Rs 1196 / 1180 with Stop loss of Rs @ 1173 for the target near @ Rs 1212 - 1220 in short term

INFOSYS FO @ RS 644

Positive Trend @ Rs 644 / 630 with Stop loss of Rs @ 622 for the target near @ Rs 660 - 666 in short term

TCS LTD FO @ RS 2244

Negative Trend @ Rs 2244 / 2273 with Stop loss of Rs @ 2288 for the target near @ Rs 2220 – 2207 in short term

RELIANCE FO @ RS 2090

Negative Trend @ Rs 2090 / 2110 with Stop loss of Rs @ 2117 for the target near @ Rs 2073 – 2070 in short term

HDFC FO @ RS 1833

Negative Trend @ Rs 1833 / 1844 with Stop loss of Rs @ 1850 for the target near @ Rs 1818 – 1808 in short term

KOTAK BANK FO @ RS 1417

Negative Trend @ Rs 1417 / 1433 with Stop loss of Rs @ 1444 for the target near @ Rs 1404 – 1396 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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