Global cues:
• The Dow jumped 161.60 points, or 0.6%, the S&P 500 climbed 0.7% and the NASDAQ Composite advanced 0.6%. Stocks ended the week on a high note, with the Dow erasing its 2020 losses.
• Walmart and Coca-Cola led the way for the Dow, rising 2.7% and 3.3%, respectively. Tech and energy were the best-performing sectors in the S&P 500, gaining 1.1% and 1.9%, respectively.
• Friday's non-farm payrolls are awaited amid fears that the recovery in the labor market is stalling, with initial jobless claims hovering at around 1 million per week.
• Inflation figures out of the euro zone on Tuesday are expected to show price growth remained tepid in August, while unemployment figures the same day are expected to point to a slight uptick.
Indian markets:
• On Friday, Sensex & Nifty posted biggest weekly gains in a month. Nifty closed at 11647.60.
• Nifty gained 2.4% this week, while Nifty Bank gaining 10%
• IndusInd Bank, Tata motors, Axis Bank & SBI have been the top Nifty gainers this week
• FIIs were net buyers of worth Rs 1004.11 Crore and DIIs were net seller of worth Rs. 543.56 Crore for August 24, 2020.
• The share price of Ruchi Soya has lost more than half its value just in the last 2 months. It is currently trading at Rs 658.
• Shares of Max India debuted at Rs 80 on the BSE after Max group relisted its arm on the bourses for trading on Friday. The stock opened at Rs 80, but later dipped below the opening price and touched the LC limit of Rs 76.
• Several states on Friday rejected Central Govt's GST proposal asking them to borrow directly via RBI to bridge the compensation shortfall.
• The National Statistical Office (NSO) will release the infrastructure output data for July and the GDP number for the April-June quarter on Monday. PMI data for manufacturing and services sectors are also due.
• Indian markets strengthened during the week gone by as investors cheered optimism about a potential treatment for coronavirus and pick up in business activity.
• The Nifty contribution chart for today was as follows:
Trends:
• A strong White Body occurred on the candles. This shows a directional consensus among the market participants.
• Nifty has filled up the gap that existed in the 11,430-11,500 zone, and this is an important development.
• For the near term, any consolidation should find support near this zone. With Nifty now firmly placed in a Rising Channel, the probability of its testing the upper trend line has risen considerably.
• But, BankNifty setup looks very bullish after giving a breakout from the current levels.
• Volatility continued to fall, as India VIX came off 2.90 per cent to 18.3475. On Monday, the index is likely to see a stable start to the week.
• India VIX was down by 8 percent on weekly basis to 18.35 levels and it has been forming lower tops since last 10 weeks. Gradual cooling of the VIX suggests bullish stance and buy on decline strategy to continue in the market.
• IRCTC: Has monopoly in the railway catering and tourism business. Fell from a high of 2000 to 780 due to the Corona Virus. Has recovered pretty well after decent set of results. Has been trading flat for the past 4 months. Highly overvalued but very good stock for the long term.
• SBI: Biggest PSU in India. Has been struggling a lot with NPAs in the recent years. Fell from a high of 350 to 150 due to COVID. Faced strong resistance at 200. Now that this resistance is crossed, some upward movement is expected.
Option strategy for tomorrow:
• The short-term trend of Nifty is positive with buy on dips strategy.
• For the weekly expiry one can sell 11850 Call option and 11500 Put by using short straddle option strategy.
• Nifty’s expected range tomorrow can be 11500 and 11750.
• Maximum call OI of 17.90 lakh contracts was seen at 11,800 strike which will act as crucial resistance for the week
• Maximum put OI of 28.32 lakh contracts was seen at 11,500 strike which will act as crucial support for the week.
• Given the current technical setup and the ongoing weakness in the US dollar, Nifty is likely to move higher and financial stocks should stay resilient along with other defensives.
Stock picks of the day:
• PVR - Buy Target 1460, Stock moved 8% on Friday and closed at 1445 levels with strong buying during the day. Expect the stock to continue its bullish momentum and move up to 1460 levels
• Bharti Airtel - Buy Target 527. MACD shows bullish signals. Showed some strong bullish signals with strong buying in the last 30 mins
• ITC Ltd - Buy Target 205. Last traded price has managed to stay above previous support level. RSI and Stochastic RSI signifying start of reversal
• GMR Infra - Sell Target 24. Stock saw massive selling on Friday and touched 52-week high of 28.25. Expect the stock to remain under selling pressure and go lower to level of 24
Results on August 31
NHPC, JK Cement, Arvind Ltd, Shivam Auto, Bharat Dynamics, Jindal Polyfilm, Nitin Castings
Source: moneycontrol
Disclaimer
Please note that all the
recommendations/views/ levels we provide are based on the theory of
technical/fundamental analysis and personal observations. This does not claim
for sure/ certain profit or any fix returns. we are not be liable for any
losses you make on the given takes and levels. You are advised to take your
position with your sense, discretion and judgment. only you would be
responsible for outcomes of your trades
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