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SGX Nifty Indicates Flat to Negative Opening; Sudarshan Chemicals, Morepen Lab to Report Today

June 22 2020
Market Preview

At 8:00 am IST, the SGX Nifty Futures was trading at 10,197, compared with Nifty’s close of 10,244 on Friday.

Market status: Confirmed Uptrend

Global stock markets: Dow 30, -0.8%; S&P 500, -0.6%; Nasdaq, +0.03%; KOSPI, -0.3%; Nikkei, -0.1%; Hang Seng, -0.4%; Shanghai Composite, +0.4%.

Bullish trend resumed as Nifty advanced 2.7% during the last week. On Friday, for the first time since February 24, Nifty retook its 100-DMA. For Nifty, 100-DMA is a crucial level compared with other moving averages. Friday’s action qualifies as an additional follow-through day as Nifty advanced 1.5% on volume higher than the previous session.

It is crucial for the index not to breach its 100-DMA the rally to continue. On the other hand, if we see Nifty add more distribution days, breaching key moving averages, and begin to see leaders falter at support, we will likely shift the market status to an Uptrend Under Pressure.

The beauty of our CAN SLIM method is that we need not "expect," "hope," or "wish for" with respect to market action. We will take what the market gives us and continue to monitor unfolding conditions. We always look for stocks with strong relative strength. But investors should understand that it is not prudent to blindly buy stocks that have a high relative strength or simply because they have been performing well. This is the essence of momentum investing, and it can get you into trouble. Rather, one should base buying decisions on sound fundamental and technical analysis. Only invest in stocks that have strong fundamentals (i.e., good sales, earnings, and margins, among others) and that are breaking out of sound base structures on heavy volume.

Key News

Sudarshan ChemicalsMorepen Laboratories, and Aia Engineering will report their Q4 results today.

Glenmark Pharms. (Nse): became the first company in India to receive regulatory approval for its oral antiviral drug Favipiravir for the treatment of mild to moderate COVID-19 patients.

Cochin Shipyard announced its Q4 FY20 results during the weekend. Total consolidated income rose 1.1% y/y to Rs 861 crore. PAT surged 44% to Rs 137 crore.

Akzo Nobel India (Nse) reported its March quarter results. Revenue from operations declined 17.6% y/y to Rs 581 crore. PAT decreased 23.1% to Rs 54 crore.

O’Neil Market Condition Report

For the 24 emerging markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 88%; Rally Attempt, 0%; Uptrend Under Pressure, 12%; Downtrend, 0%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 50%; Rally Attempt, 0%; Uptrend Under Pressure, 50%; Downtrend, 0%.

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Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.For more information, see our Legal disclosures here.

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