Morning Outlook 04th October, 2022

NIFTY:

The NIFTY opened at 17102.10 without much of a gap. The index initially moved up but failed to sustain at the higher Levels and drifted downwards after recording its intraday high at 17114.65. Prices have seen a sharp decline of more than 150 points and then started a process of consolidation which lasted for the whole afternoon and eventually broke on the downside. The index has seen another round of selling, this time with more pace, and recorded its intraday low at 16855.55. Prices have finally dosed at 16887.35 with a loss of 207 points or 1.21% down. All the sectoral indices have dosed lower today except PHARMA which ended with a gain of over 1%. METAL, AUTO, and FMCG led the bears today and ended with a loss of over 2%. A breakout on either side may give us a trading opportunity. Volatility is very high as the INDIA VIX, a benchmark index for volatility is now moving around 22. We should wait for a decisive breakout from this range and then plan our trade accordingly. As of now, we should avoid trading the index.

BANK NIFTY:

The BANK NIFTY opened at 38444.90 with a big gap down of 282 points. The index initially went up, tried to fill the gap but failed to do so. Prices have moved lower after recording its intraday high at 38641.60 and spent the whole afternoon by moving sideways. The index eventually broke on the downside, recorded its intraday low at 37963.25, and, finally closed at 37974.90 with a loss of 752 points. PSU and PVT BANKS both have performed almost the same today, saw a sharp intraday decline, and closed lower by 2.67 % & 1.52 % respectively. Within the index, in terms of points, ICICIBANK contributed the highest on the downside followed by KOTAK BANK. As mentioned in our previous letter, the support is now visible at around 37500 while resistance is visible at around 39500. We may see a process of consolidation within these levels. We may look for a shorting opportunity on a close below 37500 supports. As of now, we do not have an adequate trade setup that could suggest us a trading opportunity. Avoid trading the index.

TECHNICAL PICKS

DERIVATIVE PICKS

UPCOMING ECONOMIC DATA

NEWS UPDATES

• Indian benchmark indices ended on negative note on the first day of the week with Nifty around 16,900. At Close, the Sensex was down 638.11 points or 1.11% at 56,788.81, and the Nifty was down 207 points or 1.21% at 16,887.30. About 1436 shares have advanced, 2012 shares declined, and 150 shares are unchanged. Adani Enterprises, Eicher Motors, Adani Ports, Maruti Suzuki and Tata Consumer Products were among the top losers on the Nifty. However, gainers included ONGC, Dr Reddy’s Laboratories, Cipla, BPCL and Coal India.

• India’s Manufacturing PMI Slips In September But Remains In Expansion Zone India Manufacturing PMI stood at 55.1 in September against 56.2 in August, according to IHS Markit. A reading above 50 indicates expansion.

• Nykaa has approved a bonus share issue of five new shares each for one held by the shareholders, according to an exchange filing. the operator of the fashion products platform, gained as much as 11% after the company’s board approved a bonus share issue.

• Shares of Suzlon Energy Ltd. slumped as much as 14% after the company’s founder died due to a cardiac arrest late on Saturday.

Source: Economic Times,  Indian Express, Business Today, Livemint, Business Standard, Bloomberg Quint

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