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Stock Market Daily Updates: 7 Sep 2020

Nifty future levels are likely to remain crucial support at 11272 – 11202 points in the coming sessions. Move below 11202 points might push the index towards 11088 levels which is the highest crucial support base of the series.

Photo Credit :

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Dear Trader…

As the IHS Market India's Manufacturing Procurement Managers' Index rose last week compared to July as the Indian economy struggled to recover, and the threat of a corona epidemic still lingers around the world. In the April-June quarter, India's economic growth rate was reported to be negative for the first time in 20 years at a expected 7.5% negative, In addition the implementation of new pledge and re-pledge margin norms by SEBI has sent shockwaves through the Indian stock market and the biggest clash in the last three-and-a-half months was in the Sensex and Nifty due to geopolitical tensions between India and China, and then the sell-off began in stages.

The US markets ended lower due to tech-fuelled selloff in indexes amid a longer path to economic recovery. The number of US citizens filing new claims for unemployment benefits continued to remain near the record highs. Initial claims for state unemployment benefits came at a seasonally adjusted 0.9 million for the week ended Aug 29, 2020 v/s 1 million cases in the prior week. As per former president of US Fed, the US economy requires more stimulus, otherwise it risks of going into a "double-dip" recession. As per data from US Census Bureau, new home sales in US has increased 13.9% MoM, setting up highest record pace since 2006.

The European markets ended flat to lower amid weak performance from the Tech-stocks. As per data released by the Eurostat, the headline consumer price inflation data arrived at minus 0.2% in August vs positive 0.4% in July, which led to euro zone sliding into recession in four years.

At a local level, the lockdown caused by the Corona epidemic proved disastrous for the Indian economy and there were fears that the time to come would be difficult for the Indian economy. And the India rating had projected a decline of about 25%. Around that estimate, there was a historic decline of about 23.9% and there was an atmosphere of panic in the market. However, the point of contention is that China's economy, the origin of the Corona epidemic, is on the path to growth. In the world emerging from the Corona epidemic, China is the only country whose GDP growth is in the plus while the GDP growth of countries like India, USA and Japan is in the negative.

After the drastic implementation of the lockdown, the manufacturing sector, which has been getting massive relief in various stages of unlock in the country, is booming again. The PMI rose to 52 after four months.The improvement in the sector's PMI is a positive sign for the economy, which had hovered at 46 during the previous month of July and 47.2 in June. 

Friends, not only India, but all over the world stock markets are witnessing a wonderful liquidity boom. Apart from a one-sided rally over the last six months, one or two bearish crashes are also needed in the stock market for a long-term rally. Profit booking is essential for every boom, as allowing new investors to buy sector-specific blue chips and fundamental stocks is also an important aspect of a new boom.

Friends, Instead of criticizing, think twice that SEBI for always making decisions in the interest of investors as well as traders, follow it, there will be a definite benefit in the long run...the rural economy is in good shape and also slowly recovering. Of course, the quarterly results of the remaining companies in the coming days, the status of the Covid-19 case, the growing tension between India and China and the trade war between the US and China are likely to determine the movement of the Indian stock market.

The first week of the new series started with volatility and while Nifty saw sharp sell-off on Monday to test 11325 levels, it recovered towards 11600 on the back of positive global cues and continued buying from FIIs. However, selling pressure was resumed on Friday and Nifty future closed the week near lows losing almost 2.50% in the week. From the technical view, Nifty future levels are likely to remain crucial support at 11272 – 11202 points in the coming sessions. Move below 11202 points might push the index towards 11088 levels which is the highest crucial support base of the series. On higher side, immediate hurdle is expected around 11404 to 11474 points and any fresh upside momentum is likely only above these levels.

Dear Traders…. For the Trading Idea of…

Ø  Nifty Future opened @ 11351 as on 07.09.2020..!!

For Intraday, Nifty Future has resistance at 11373 – 11404 Point; above which other resistance levels are at 11433 – 11460 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 11303 – 11288 Point; below11288 Point, other support levels are at 11272 – 11260 Point.

I am positive for the next bullish trend only above @ 11460 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 @ 11460 Point, again then the upper side target is quite high and it may touch @ 11474 Point in the short term.

ØBank Nifty Future opened @ 23016 as on 07.09.2020..!!

For Intraday, Bank Nifty Future has resistance at 23088 – 23130 Point; above which other resistance levels are at 23202 – 23272 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 22970 – 22909 Point; below22909 Point, other support levels are at 22808 – 22676 Point.

I am positive for the next bullish trend only above @ 23272 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 @ 23272 Point, again then the upper side target is quite high and it may touch @ 23303 Point in the short term.

Ø Trading Idea for the derivative stocks….

Ø MUTHOOT FINANCE FO @ RS 1115

Positive Trend @ Rs 1115 / 1103 with Stop loss of Rs @ 1093 for the target near @ Rs 1144 - 1150 in short term

Ø CIPLA LTD FO @ RS 726

Positive Trend @ Rs 726 / 717 with Stop loss of Rs @ 707 for the target near @ Rs 737 - 750 in short term

Ø HCL TECHNO. FO @ RS 696

Positive Trend @ Rs 696 / 688 with Stop loss of Rs @ 680 for the target near @ Rs 712 - 720 in short term

Ø SUN PHARMA FO @ RS 513

Positive Trend @ Rs 513 / 505 with Stop loss of Rs @ 496 for the target near @ Rs 524 - 533 in short term

Ø KOTAK BANK FO @ RS 1372

Negative Trend @ Rs 1372 / 1388 with Stop loss of Rs @ 1404 for the target near @ Rs 1357 – 1344 in short term

Ø INDIGO FO @ RS 1264

Negative Trend @ Rs 1264 / 1288 with Stop loss of Rs @ 1300 for the target near @ Rs 1244 – 1230 in short term.

Ø HDFC BANK FO @ RS 1112

Negative Trend @ Rs 1112 / 1120 with Stop loss of Rs @ 1130 for the target near @ Rs 1098 – 1090 in short term

Ø M&M FO @ RS 633

Negative Trend @ Rs 633 / 640 with Stop loss of Rs @ 647 for the target near @ Rs 618 – 608 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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