Pre Market Report - 5th October 2020

Global cues: 

•       US stocks closed lower on Friday as news that US President Donald Trump tested positive for COVID-19 put investors in a risk-off mood and added to mounting uncertainties surrounding the election.

•       The Dow Jones Industrial Average fell 134.09 points to 27,682.81 while the S&P 500 lost 32.36 points to 3,348.44.

•       European stocks closed slightly higher on Friday, as investors pinned hopes on more US stimulus after data showed job growth slowed more than expected in September in the world’s largest economy.

•       The pan-European STOXX 600 rose 0.3 per cent, capping another volatile week which started with a bout of bargain hunting in beaten-down sectors that helped the benchmark record a 2 per cent weekly gain.

 

Indian markets: 

•       On October 1, The BSE Sensex surged 629.12 points or 1.65 percent to 38,697.05 amid buying across sectors, while the Nifty50 jumped 169.50 points or 1.51 percent to 11,417.

•       FIIs were net buyers of worth Rs 1,632.25 crore, and DIIs were net seller of worth Rs 259.46 crore, for October 1, 2020

•       all sectoral indices ended on a positive note, indicating all-round participation. Among the sectors, banks clearly led the upward march today, as the Nifty Bank index jumped 4.1%. IndusInd Bank (+12.4%), Bajaj Finance (+5.0%) and Axis Bank (4.1%) were top gainers in the Nifty50.

•       The market sentiment was generally upbeat after the Purchasing Managers’ Index for September came in at 56.8—the highest reading in the past eight years. 

•       Under the Unlock 5.0 guidelines, the central government has permitted reopening of multiplexes from 15 October. Although cinema halls would be allowed to run at 50% seating capacity, this move is a welcome sign for the sector, which was completely shut during the lockdown. Shares of major multiplex operators such as PVR (+7.8%) and Inox (+6.1%) reacted positively to the development.

•       Chemcon Speciality Chemicals listed on the exchanges with a bumper 115% premium over its issue price of ₹340. The listing gains were expected, considering the relatively small issue (₹318 crore) was oversubscribed by a whopping 149 times.

•       Angel Broking, one of the largest retail broking houses, is going to debut on bourses on October 5. The issue price is fixed at Rs 306 per share, the higher price band. Given the nearly 4 times subscription to the IPO, whether it will list in premium or discount will be keenly watched.

•       The nifty contribution chart for today was as follows:

 

 

 

 

Trends:

•       In the previous week alone, the Nifty rallied over 600 points. For the week, the index gained 3.3 percent forming a Bullish Harami pattern on the weekly scale.

•       For the next few trading sessions, 11360 should be the level, trading above the same we can expect uptrend continuation wave up to 11500-11550. However, dismissal of 11360 may trigger short term correction up to 11250-11200. Invest in strong companies between 11250-11200.

•       The overall structure of the index remains positive for a ‘buy on decline’ strategy.

•       The Indian market will open on Monday by adjusting to the global trade setup as Friday was a trading holiday in india.

 

Option strategy for tomorrow:

•       As part of weekly expiry strategy one can Sell 11500 CE option and 11850 PE option.

•       Weekly range of Nifty would be 11800 to 11500.

•       Maximum call OI of 17.43 lakh contracts was seen at 12,000 strike which will act as crucial resistance for the Month

•       Maximum put OI of 36.28 lakh contracts was seen at 10,500 strike which will act as crucial support for the Month

•       This week marks the beginning of earnings season. Besides, news related to COVID-19 and updates on the US Presidential election will also be closely tracked

 

 

Stock picks of the day: 

•       Manappuram Finance: Stock closed at price of 166.3 on Thursday. Stock formed a white Marubozu the daily chart. Expect the buying momentum to continue and expect the stock to reach 170 price range.

•       HDFC –Stock closed at price of 1787.8 on Thursday. The recent sell off by the FPIs in the cash market had a major impact on the stock and its major support of 1730 was broken. Currently the stock is trading in the overbought region as per STOCHRSI and William %R indicator. Expect the stock to go to 1760 levels.

•       Aarti Industries -Stock closed at price of 1024 on Thursday. RSI and MACD have sell signal on the daily chart. Stock saw some buying in the last hour of trade on Thursday but expect this to reverse and expect the stock to trade near price range of 1010

 

 

 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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