Dalal St Daily 21st september 2020

  •    US markets ended in the negative territory for third straight session on Friday. Investors started   to dump on high flying tech stocks. Apple is almost down by 20% from it’s recent highs. Not      everything lasts for long, something must start after the end of the other. All markets have been  correcting heavily to show up some big momentum is coming ahead in time. Bulls are taking some power nap and may awake anytime.

·         Dollar index is weakening which is not a good sign for Indian stock markets.

·         When US markets breaking it’s all time highs our markets was still down 5-6% and was not aggressive but struggling compared to US markets. forget about banknifty it has still recovered only half of its fall. But Asian markets reacted heavily for the fall in US markets.

·         On Thursday when the news came about the interest rate that will continue and be the same for next 3 years and which was good for the stock market it reacted opposite to the news and ended up in the negative territory.

·         Nifty is facing huge resistance at 11,555-11570, friday was the 5th straight sessions where nifty was facing huge sell of @ 11,568-11,570 and finding support @11380-11450 zones. We may expect a break out or break down once these zones are breached. From my view i'm expecting the break out of resistance zone.

·         Once again on friday HDFC twins, kotak, HUL were the major contributors which pulled the Nifty down.

·         Last week ever time when Nifty faced resistance @ 11570, Nifty fell nearly 50-100 points in average.

·         Banknifty is finding resistance @22650 & 22750 zones and suport @22000 & 22200 zones. Banknifty closed near the crucial level for banknifty. Any breakdown of this level may put banknifty in bearish mode and next support lies @21400. Banknifty is down by more than 3200 points 12% from it's recent highs.

·         HDFC Bank is facing many negative news impact from many days starting from the promoter offloading his shares to recent action suit filed by Rosen Law firm for alleged improper lending practices in it’s vehicle financing arm.

·         Bank nifty heavy weights are finding resistance @200 D EMA.

·         Axis bank closed near to it’s crucial support.

·         Nifty AUTO, Cement, Pharma & IT sector is outpeforming and adding strength to Nifty.

·         Reliance industries saw some short covering on friday Bulls are getting ready again after resting for a week.

·         For Nifty highest OI is @12000 on the CALL side & highest OI is @11500 on the PUT side and fresh 2 lakh contracts has been added to the strike 11500 on friday.

·         For Banknifty highest OI stands @22500 on the calls & highest OI is @21000 on the PUTS.

·         Banking stocks are seeing huge Unwinding in it's open interest from thursday which may trigger much more fall in the coming sessions.

·         coming week being the monthly expiry we can expect some volatile moves in coming sessions. And the most important part of the market is how Banknifty reacts on that day. Majority of the people are expecting short covering after the huge correction but it won't happen. As the quote says "In the markets you have to go along with the wave and not against the wave by expecting the market to turn for your favour".

·         For tomorrow Nifty may trade between 11200-11800

·         Banknifty may trade betweenn 21400-22700

Important events coming this week is as follows

On Monday & Tuesday

  1. U.S. Fed speech ***

On Wednesday

  1. US Crude oil inventories data ***
  2. US manufacturing PMI data **

On Thursday

  1. US Initial jobless claim data ***

On Friday

  1. Core durable goods order data **

·         There are no major events coming this week for Asian markets except interest on interest hearing from the court.

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