Daily Market Outlook – 7th September 2020

NIFTY:

The Nifty opened with a gap down of almost 173 points in the morning at 11354 and then moved up in the first 30 minutes and then moved sideways. After that, the market goes up to a high of 11452. Around 1:30 PM, the Nifty began a sharp down move of almost 149 points and made its low at 11303. Finally the Nifty closed lower by 194 points at 11333. Bank, Pharma and Realty sectors have underperformed and closed lower by more than 2%. Nifty violates 11450 support but does not give a trade. We identified 11450 as a support level below which we should go short in the market. Traders may like to take a short position using put options. The position may be taken on a rally which touches 11450 approximately. The position may also be taken if Nifty falls below 11300. However if there is a gap down below 11300, then the position is cancelled.

Our stop for this trade is 11550 if we take a sell on rally when Nifty touches 11450. If the trade is taken when the Nifty goes below 11300 out stop will be 11400. If the Nifty were to go below 11300, it would then confirm a bearish head and shoulder with a target of 10800. While the index remains above 11300 we cannot have a confirmed opinion of a downtrend

BANK NIFTY:

Bank Nifty opened at 23119.15 with a gap down of 457 points. The index fell down further within the first ten minutes of trading and made its intraday low at 22876.90. Prices then saw a sharp rally and then a sharp decline for almost the same points and finally closed at 23084.20 with a loss of 492 points. Private and PSU Banks both have seen a decline and closed lower by more than 2%. Within the index, in terms of points Bandhan Bank contributed highest while Axis Bank the lowest. It was a volatile day where prices opened with a gap down, moved on both sides intraday and finally closed near its opening price. Our short trade was executed around 23120. Short term trend is sideways. We may see a correction here. First warning of an uptrend will come when prices break above 23500.

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NEWS UPDATES

• Future Retail Ltd plunged to a net loss of Rs. 470.61 crore in the March quarter compared to a net profit of Rs.203.17 crore in the year-ago, underscoring the financial stress at one of India’s prominent retail chains and curbs on operational hours at its stores due to the coronavirus pandemic. Standalone revenue from operations fell by 17.3% from Rs. 5,396.60 crore in the Q4FY20 to Rs. 4,445.35 crore during January-March 2020. Future Retail runs large-format retail stores, including FBB, Big Bazaar, Nilgiris and

• Vodafone Idea board has approved a fund-raising plan to secure Rs 25,000 crore as concerns over the company’s finances deepen. Vodafone Idea said that it will raise up to Rs 15,000 crore through issue of equity shares or securities convertible into equity shares, Global Depository Receipts, American Depository Receipts, foreign currency convertible bonds, convertible debentures, warrants, composite issue of non-convertible debentures and

• Reliance Industries Ltd (RIL) has offered all 13 financial and strategic investors of Jio Platforms the option to invest in its Reliance Retail Ventures Ltd (RRVL) unit, two people aware of the developments said. These investors, include Facebook, Google, KKR, Silver Lake and TPG. They helped RIL amass a total of Rs.1.52 trillion in the past few months by picking up a combined 33% stake in its digital unit, Jio Platforms

• BPCL has offered its employees stock options as part of reward ahead of its The stock options are being issued to the staff at one-third of the market price.

Source: Economic Times, Moneycontrol ,Business Today,Livemint, Business Standard, Bloomberg Quint

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