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Stock Market Daily Updates: 6 Aug 2020

Market going through high volatility on three things to focus is Rate cut, Moratorium Extension, Onetime Restructuring, these three things will define trend of the Market for Rest of August 2020.

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Dear Trader…

Markets ended almost flat amid volatility as participants preferred to book some profit at higher levels on the third day of the week. The Indian stock market rallied yesterday on the back of a recovery in global markets amid reports of success in finding corona vaccines by pharma giants to curb corona infestation with a worrying increase in the number of corona infections on the global front.

Both Benchmarks had topped their respective psychological levels with good global signals and traders prefer to book profits at higher levels and uncertainty around the outcome of the today - RBI policy.

Market going through high volatility on three things to focus is Rate cut, Moratorium Extension, Onetime Restructuring, these three things will define trend of the Market for Rest of August.
Friends, the Corona epidemic has swept the world economy. However, India's position on this issue has become more serious. After the unlock phase that started last June, the number of corona cases in India has been steadily increasing in July. As a result, many states have implemented lockdowns in their own way, which has once again stalled the growth of the economy seen in the early stages of unlocking. On the other hand, geopolitical challenges have also arisen. The lockdown, which took effect at the end of March, has had an adverse effect on the exchequer as economic activity at all levels has come to a standstill. The government has set a target of Rs 16.35 lakh crore in tax revenue for the full year, of which only 8% has been collected in the first three months of the current financial year. On the other hand, corporate income has also declined by 23% on the back of declining tax revenue.

The government had also set a high target for disinvestment in the current financial year, but the process has been hampered by Corona. Thus, there has been a decline in government revenue at all levels. Thus, given all these issues, the economy will be adversely affected in the near future.

Gold and Silver have been best performing assets so far this year with 40 percent and 50 percent returns, respectively, so far this year. Gold continues to glitter as the yellow metal scaled fresh record highs on August 5 while equity markets witnessed profit booking at higher levels. India Gold surpassed Rs 55000 per 10 gm market, and we continue to be bullish on Gold with potential targets neat at Rs 60000/10 gms and Silver expected to reach anywhere near at Rs 75000 in short term.

For the time being, Trader may hold long positions with the stop loss of 11008 points and a sustainable move above 11230 - 11272 is expected to pull Nifty towards 11303 in the near term , traders to remain neutral on index by adopting a stock-specific approach. Banking and Capital goods are in the accumulation zone and expected to gain momentum; Midcap space is expected to consolidate.

India VIX fell by 1.06 percent to 23.56 levels. Decline in VIX from its recent bounce of 25.69 suggests that Bulls are using any decline as a buying opportunity and overall trend could remain bullish. Nifty trading range may remain at 10808 to 11303 zone for coming few days.

Nifty Future opened @ 11140 as on 06.08.2020
For Intraday, Nifty Future has resistance at 11173 - 11188 Point; above which other resistance levels are at 11202 - 11230 Point with highly Volatile Trend

Nifty Future has Downside support levels are at 11088 - 11033 Point; below 11033 Point, other support levels are at 11008 - 10988 Point.

I am positive for the next bullish trend only above @ 11202 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 @ 11202 Point, again then the upper side target is quite high and it may touch @ 11230 Point in the short term...!!!

Bank Nifty Future opened @ 21685 as on 06.08.2020
For Intraday, Bank Nifty Future has resistance at 21770 - 21808 Point; above which other resistance levels are at 21888 - 21909 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 21575 - 21474 Point; below 21474 Point, other support levels are at 21373 - 21303 Point.

I am positive for the next bullish trend only above @ 21888 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 @ 21888 Point, again then the upper side target is quite high and it may touch @ 22008 Point in the short term

Prediction on Stock specific Movement as on 06.08.2020
MUTHOOT FIN FO @ RS 1253

Positive Trend @ Rs 1240 / 1220 with Stop loss of Rs @ 1208 for the target near @ Rs 1273 - 1280 in short term

AURO PHARMA FO @ RS 868
Positive Trend @ Rs 868 / 850 with Stop loss of Rs @ 838 for the target near @ Rs 888 - 898 in short term

TECH MAHINDRA FO @ RS 656
Positive Trend @ Rs 656 / 644 with Stop loss of Rs @ 638 for the target near @ Rs 667 - 670 in short term

TATA STEEL FO @ RS 386
Positive Trend @ Rs 386 / 380 with Stop loss of Rs @ 376 for the target near @ Rs 397 - 404 in short term

HDFC BANK FO @ RS 1037

Negative Trend @ Rs 1037 / 1047 with Stop loss of Rs @ 1055 for the target near @ Rs 1023 - 1016 in short term...!!!

CIPLA LTD FO @ RS 727
Negative Trend @ Rs 727 / 737 with Stop loss of Rs @ 744 for the target near @ Rs 713 - 707 in short term

LUPIN FO @ RS 945
Negative Trend @ Rs 945 / 960 with Stop loss of Rs @ 969 for the target near @ Rs 933 - 919 in short term

DIVIS LAB FO @ RS 2693
Negative Trend @ Rs 2693 / 2707 with Stop loss of Rs @ 2717 for the target near @ Rs 2677 - 2660 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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