Pre Stock Market Report, September 04, 2020

 

Pre Stock Market Report

1. US markets tubled.
2. Nasdaq down more than 5%.
3. For the last two weeks, US markets kept moving higher.
4. Today, very important data, Jobs data, is due.
5. So markets were over bought, ahead of a key data, profit booking came.
6. But the profit booking is so severe that Nasdaq has fallen more than 5%.
7. We have already seen 2 such profit booking in last one month.
8. Last month, Nifty fell from 11400 to 11100 intraday.
9. Last Monday, Nifty fell from 11800 to 11350 intraday.
10. When it comes to correction or crash, we always do first.
11. Even in 2008, we fell in January, way before other markets.
12. Today's data on Jobs is expected to be good but Private Sector Jobs data that came on Wednesday was not good as expected.
13. That could be one reason for such a huge profit booking.
14. Moreover, when real Economy opens up, money should move from new Economy stocks to old Economy stocks.
15. Going forward, Dow is likely to do better than Nasdaq.
16. But Asian markets are not reacting as bad as US.
17. Even Dow futures trading close to 200 points higher.
18. Nifty is likely open 100 points down.
19. Today can be a Black Friday for our Markets.
20. This Liquidity driven rally which wasn't backed by Fundamentals should have. Ended at some point.
21. First some good things if we look at - 
22. We have already fallen two times just like US fell yesterday, so we may not react proportinally.
23. Both FIIs and DIIs were net buyers (though they bought for very little amount, less than Rs 100 crore) in Cash market.
24. DIIs kept on selling for last two months and supported the markets when Nifty fell from 11800 to 11350 last Monday.
25. So at lower levels, there will be support from DIIs.
26. Things can stabilise in US after today's jobs data (if it is good)
27. and the negatives - 
28. Banking stocks look very weak, Bank Nifty yesterday broke day before yesterday's low.
29. Technically that is not a good sign.
30. Normally when markets fall, IT stocks will support, now due to Nasdaq fall, IT stocks may also fall.
31. Supreme Court postponed the hearing of Moratorium case to Sep 10 but said that Banks should not consider accounts as NPA until further notice for all the accounts which were not NPA as of August 31.
32. We do not know how this news will be taken by the market.
33. In a normal market, this is actually a good news for Banks.
34. Last Monday low for Bank Nifty future was 23371.
35. That is likely to be broken today.
36. But Nifty future low was 11350.50, that may not be broken.
37. Nifty future may trade between 11400 and 11550
38. Now do not go and chase the dip blindly.
39. It's not like before that every dip will be bought.
40. Now try to focus on sell on rallies type.
41. Because clearly markets have been facing resistance on higher side.
42. Yesterday Nifty was down hardly 20-30 points.
43. But Bank Nifty was down more than a percent.
44. It is looking very weak.
45. Just a word of caution do not go and buy the dip now.
46. We do not know how far the dip might keep dipping.
47. Look to sell on rally.
48. Nifty might trade between 11320 to 11480.