Stock Market Daily Updates: 23 Oct 2020

Dear Trader…

The Indian stock market started trading with a decline and plunged with caution in global markets, creating a civil war-like situation in Pakistan's Sindh province. Nifty index remained highly volatile as a roller coaster ride was witnessed in between 11808 to 12008 levels. It tested psychological 12k marks of the session but it failed.

India VIX moved down by 1.24 percent from 22.91 to 22.63 levels. The index negated its higher highs of the last three sessions but it needs to further cool down below 20 zones for market stability and keeping in account volatility could spike ahead of US election.

Corporate India's quarterly results saw modest to negative results in India, with the world expected to emerge from the Corona epidemic next year. With elections looming in the US, global markets, including India, are seeing risk-averse sentiment, with the monsoon being very successful across the country; the agriculture sector is expected to see high extraordinary growth this year. 

This is likely to boost the rural economy and boost economic growth. Given the current trend, the benchmark Nifty futures could be seen near its pre-Diwali high of 12,400 in early 2020, if for any unforeseen adverse reasons. There are still 16 trading sessions left before Diwali. If global markets support and the benchmark jumps to 12,000, there will be frenzy in sentiment. 

The improvement seen in the most weighted banking sector in the market is also encouraging. Sentiment in the banking sector has changed as HDFC Bank announced better-than-expected results for the second quarter. HDFC Bank, the third largest market cap after Reliance Industries and TCS, topped the list after January 2020. While it is 5% below the highest level it showed in December 2019. Thus banking seems to take the lead in the current reforms in the market. The last three-four trading sessions in IT have seen high level of profit booking but given the orbs like buyback, they are less likely to fall further than the current level. Thus the two heavyweight sectors are ready to provide adequate support to the benchmark.

Markets are closely following global cues and indications are still mixed from that front. Despite the positive bias, we might continue to see volatile swings so traders should prefer hedged positions and maintain their focus on the selection of stocks.

Nifty future tested major support at 11808 points 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. 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.

We still maintain our stance that 11808 points the low of bearish engulfing pattern remains a make or break level on closing basis. If Nifty future manages to hold the of 11909 points then we may see momentum towards 11989 to 12008 points. At present cautiously positive approach at current level should be adopted. However, stock specific activity is likely to continue.

Dear Traders…. For the Trading Idea of…

Nifty Future opened @ 11934 as on 23.10.2020

For Intraday, Nifty Future has resistance at 11969 – 11989 Point; above which other resistance levels are at 12008 – 12033 Point with highly Volatile Trend,

Nifty Future has Downside support levels are at 11933 – 11919 Point; below11919 Point, other support levels are at 11909 – 11888 Point.

I am positive for the next bullish trend only above @ 12008 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 @ 12008 Point, again then the upper side target is quite high and it may touch @ 12033 Point in the short term

Ø Bank Nifty Future opened @ 24660 as on 23.10.2020

For Intraday, Bank Nifty Future has resistance at 24707 – 24777 Point; above which other resistance levels are at 24808 – 24838 Point with highly Volatile Trend,

Bank Nifty Future has Downside support levels are at 24633 – 24606 Point; below24606 Point, other support levels are at 24575 – 24530 Point.

I am positive for the next bullish trend only above @ 24808 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 @ 24808 Point, again then the upper side target is quite high and it may touch @ 24838 Point in the short term

Ø Trading Idea for the derivative stocks

Ø KOTAK BANK FO @ RS 1397

Positive Trend @ Rs 1397 / 1388 with Stop loss of Rs @ 1380 for the target near @ Rs 1418 - 1430 in short term

Ø INDIGO FO @ RS 1368

Positive Trend @ Rs 1368 / 1344 with Stop loss of Rs @ 1330 for the target near @ Rs 1388 - 1397 in short term

Ø LUPIN LTD FO @ RS 998

Positive Trend @ Rs 998 / 990 with Stop loss of Rs @ 977 for the target near @ Rs 1013 - 1020 in short term

Ø TECH MAHINDRA FO @ RS 829

Positive Trend @ Rs 829 / 818 with Stop loss of Rs @ 808 for the target near @ Rs 834 - 840 in short term

Ø HDFC BANK FO @ RS 1247

Negative Trend @ Rs 1247 / 1260 with Stop loss of Rs @ 1277 for the target near @ Rs 1230 – 1218 in short term

Ø GODREJ PROPERTIES FO @ RS 1051

Negative Trend @ Rs 1051 / 1073 with Stop loss of Rs @ 1088 for the target near @ Rs 1033 – 1018 in short term

Ø LARSEN LTD FO @ RS 944

Negative Trend @ Rs 944 / 960 with Stop loss of Rs @ 973 for the target near @ Rs 930 – 919 in short term

Ø GLENMARK PHARMA FO @ RS 494

Negative Trend @ Rs 494 / 508 with Stop loss of Rs @ 515 for the target near @ Rs 488 – 480 in short term

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