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SGX Nifty Indicates Positive Opening; Nifty Reclaiming 50-DMA Crucial For Further Upmove

September 30 2020
Market Preview

At 8:00am IST, the SGX Nifty Futures was trading at 11,293, compared with Nifty’s close of 11,222 yesterday.

Market status: Rally Attempt

Global stock markets: Dow 30, -0.5%; S&P, -0.5%; Nasdaq, -0.3%; Nikkei, -0.1%; Hang Seng, +2.1%;

Yesterday, Nifty, after a gap-up opening, found resistance near its 50-DMA. The index traded toward the day's low of 11,181 and closed the volatile trading session near the lower half of the trading range. Volume was lower than that of the previous session. Further, we changed the market status to a Rally Attempt as Friday was a blue rally day (Day 1) and Nifty managed to stay above its Day 1 low for two consecutive sessions. In the broader market, both Midcap and Smallcap closed 0.2% and 0.3% lower, respectively.  On the sectoral front, mixed reactions were observed. Nifty Metal (+2%) was up the most. On the flip side, Nifty FMCG (-1.5%) and PSU Bank (-2.2%) were the major two decliners.

Looking forward, we would prefer to see a follow-through day before shifting the market to a Confirmed Uptrend.  (A follow-through day is a solid up session, generally a 1.5% or higher gain, with volume being higher than the previous day). Should this occur, the focus will be on ideas that show the best relative strength with good accumulation. Stocks that recover the quickest tend to lead the next run. On the flip side, if the Nifty breaches its recent low of 10,790, the market will be moved back to a Downtrend.

Key News

Welspun (Nse) received multiple orders of approximately 147 KMT and valued at Rs 1,400 crore. The total order book now stands at 755 KMT valued at ~Rs 6,300 crore.

Indiabulls Housing Fin sold a portion of its stake in OakNorth Holding to raise Rs 630 crore.

-The INR depreciated by 8 paise to Rs 73.85 per USD, while gold price inched ~1% higher to about Rs 50,500 per 10 grams.

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, 12%; Rally Attempt, 4%; Uptrend Under Pressure, 68%; Downtrend, 16%.

For the 24 developed markets tracked by our institutional research team, the market status breakdown is as follows: Confirmed Uptrend, 4%; Rally Attempt, 4%; Uptrend Under Pressure, 60%; Downtrend, 32%.

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