Stock Market Daily Updates: 7 Oct 2020

Dear Trader…

The stock market is witnessing a festive spark on tracking positive global cues as banking stocks led the rally on showing healthy deposits & advance growth, with signs of recovery in growth to pre-COVID level, while a positive decision by the Supreme Court on compound interest during the moratorium period and the central government's affidavit in the Supreme Court last weekend to waive interest on loans and the government will bear the cost are expected to affect banks.

Most of the heavyweight constitutes have witnessed fresh additions in long positions at the beginning of the series itself which adds to the bullish checklist for the entire series and markets had a good start for the week as the heavyweights from the IT, and some of the Pharma, Steel and the Banking space had seen good momentum. We may see a shift in the focus with the beginning of the earnings season. Besides, the RBI has announced new dates for the MPC meeting and the outcome will be known on October 9.

Nifty future managed to end the session trade above 11660 levels. Nifty future has given a V-shaped recovery from the recent low of 10808 levels which was its 200 DMA support & NSE500 and rebounded from there over the last few sessions - this rally has been supported by the return of net buy flows from domestic institutional investors after a gap of nearly 2 / 3 months given the backdrop of elevated redemptions from domestic mutual funds over the last few months, this turn in flow environment speaks to ebbing of redemption pressures so traders should continue with “buy on dips” in the index trade while stocks may continue to see the swings on both sides.

Going ahead, we believe the market momentum is in strong hands, as the market leaders are back to their recent highs despite last week’s sharp decline, indicating inherent strength and the index to resolve above upper band of consolidation at 11606 points and gradually retest recent highs of 11800 in October. 

It is advisable for traders to maintain their stance that the trend is volatile and pullback rally is in offing and selling may emerge. Hence trader needs to be cautious at current level to long position and near resistance zone. Infect, rather than the index, taking a sector/stock specific approach now could be a better strategy and there could be trading opportunities on both the sides of the trade. Hence, traders are advised to avoid aggressive longs here and trade look for stock specific opportunities.

In the coming days, we expect the Nifty future to extend the current upward momentum on the back of strong Global cues. The daily stochastic remain in uptrend; however after the recent up move it has approached overbought territory.

We expect broader market relative outperformance to endure, some consolidation as far as Nifty future levels are concerned, technically, on the higher side resistance is placed at around 11707 – 11737 points of the immediate swing high and extend the up move towards 11808 levels amid stock specific activity ahead of the Q 2FY21 result session, while on the downside, major support exists at 11606 then 11577 points.

Dear Traders…. For the Trading Idea of…

Nifty Future opened @ 11676 as on 07.10.2020

For Intraday, Nifty Future has resistance at 11707 – 11717 Point; above which other resistance levels are at 11733 – 11770 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 11660 – 11633 Point; below11633 Point, other support levels are at 11616 – 11606 Point.

I am positive for the next bullish trend only above @ 11733 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 @ 11733 Point, again then the upper side target is quite high and it may touch @ 11770 Point in the short term

ØBank Nifty Future opened @ 22850 as on 07.10.2020

For Intraday, Bank Nifty Future has resistance at 22909 – 22970 Point; above which other resistance levels are at 23008 – 23088 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 22787 – 22707 Point; below22707 Point, other support levels are at 22676 – 22606 Point.

I am positive for the next bullish trend only above @ 23008 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 @ 23008 Point, again then the upper side target is quite high and it may touch @ 23088 Point in the short term

Ø Trading Idea for the derivative stocks

Ø ACC LTD FO @ RS 1441

Positive Trend @ Rs 1441 / 1414 with Stop loss of Rs @ 1408 for the target near @ Rs 1460 - 1474 in short term

Ø BATA INDIA FO @ RS 1353

Positive Trend @ Rs 1353 / 1344 with Stop loss of Rs @ 1330 for the target near @ Rs 1373 - 1380 in short term

Ø GRASIM IND. FO @ RS 753

Positive Trend @ Rs 753 / 744 with Stop loss of Rs @ 737 for the target near @ Rs 767 - 774 in short term

Ø BHARTI AIRTEL FO @ RS 426

Positive Trend @ Rs 426 / 414 with Stop loss of Rs @ 408 for the target near @ Rs 436 - 444 in short term

Ø MUTHOOT FIN. FO @ RS 1193

Negative Trend @ Rs 1193 / 1208 with Stop loss of Rs @ 1212 for the target near @ Rs 1177 – 1160 in short term.

Ø M & M FO @ RS 631

Negative Trend @ Rs 631 / 644 with Stop loss of Rs @ 660 for the target near @ Rs 616 – 606 in short term.

Ø INDUSIND BANK FO @ RS 619

Negative Trend @ Rs 619 / 633 with Stop loss of Rs @ 644 for the target near @ Rs 606 – 597 in short term.

Ø BIOCON LTD FO @ RS 463

Negative Trend @ Rs 463 / 477 with Stop loss of Rs @ 483 for the target near @ Rs 455 – 447 in short term

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