Good Morning & Welcome to Friday's trading action at Dalal Street, dated 23rd August 2019.

SGX Nifty indicating an uninspiring trading session.

Overnight, Wall Street traded sluggish as the yield spread between 10-year and 2-year Treasuries inverted for the third time this week.

Investors are now purely focusing on the annual Federal Reserve symposium in Jackson Hole, Wyo., where Fed officials will provide more insight about coming monetary policy.

7 AM GLOBAL UPDATE:

DOW (+50, 26252)

NASDAQ (-29, 7991)

SGX NIFTY (-13, 10919)

NIKKEI (+61, 20688)

HANG SENG (+9, 26057)

BOVESPA (-1191, 100011)

OIL (+0.07, $55.42)

GOLD (-2, $1506)

USD/INR: 72.28

INSTITUTIONS:

FII: -902.99 Cr

DII: +1719.07 Cr

SUCCESSFUL INVESTING IS ANTICIPATING THE TRENDS OF:

Global: Neutral.

FII: Negative.

DII: Positive.

F&O: Negative.

‪Trend:‬ Down.

Sentiment: Negative.‬‬‬

NIFTY’s CRUCIAL LEVELS:

Nifty’s CURRENT MARKET PRICE: 10,741.

Nifty’s SUPPORT:

Intraday: 10671/10501.

Medium Term: 10001, 9750.

Long Term: 8,951.

Nifty’s RESISTANCE:

Intraday: 10897/11007.

Medium Term: 11189/11501.

Long Term: 12,001.

Nifty’s RANGE:

Intraday: 10645-10845.

Medium Term: 10701-11507.

Long Term: 10001-11901.

Nifty’s OUTLOOK:

Intraday: Negative.

Medium Term: Neutral.

Long Term: Neutral.

IMPORTANT THEMES FOR THE DAY:

Sentiments are down at Dalal Street — primarily as hopes of stimulus are dimming. Chief Economic Adviser (CEA) Krishnamurthy Subramanian on Thursday virtually ruled out a major stimulus package for the economy, saying “profit is private, losses are public” was not good economics.

There is negativity also on backdrop of indications that the U.S. Federal Reserve last month wasn’t aggressively looking to cut interest rates in the world’s largest economy.

Again and again, the U.S bond market is signalling a recession. The closely watched 2-year Treasury note rate rose above its longer-term counterpart in the 10-year Treasury not, representing an inversion of the bond-market yield curve. Yields have clearly inverted and that makes perma-bull investors increasingly anxious as the said gauge has preceded the past seven recessions.

You can also blame major part of negativity at Dalal Street to the FIIs camp who are simply seen dumping Indian shares; pulling out Rs. 10,656 crores in the month of August. FIIs were net sellers in yesterday’s trading session as they sold shares worth Rs. 903 crores.

Tumbling equities and incessant foreign fund outflows are also weighing on sentiment at Indian Rupee. The Indian Rupee has crashed to over 8-month low of 71.81. Blame it also to the sudden drop in Chinese yuan.

That brings us to our call of the day which suggests that battle lines have been drawn around Nifty index, and the derivative market is handsomely rewarding investors for choosing bearish sides.

Technically speaking, buying advised only above Nifty 11,001 mark. Well, technically, things could improve only if Nifty moves above its key hurdles at 11,001. Until 11,001 mark holds as resistance; pessimism will continue to be the buzzword at Dalal Street, taking Nifty towards its psychological 10,000 mark.

As per derivative data, Maximum Call Open Interest (OI) of 44.98 lakh contracts was seen at the 11,000 strike price. This 11,000 will act as a crucial resistance level in the August series. Maximum Put Open Interest of 25.18 lakh contracts was seen at 10,500 strike price, which will act as crucial support in August series.

For today, DHFL and IDBI Bank are under F&O ban.

Our chart of the day suggests establishing short positions in stocks like PAGE INDUSTRIES, KOTAK BANK and JUBILANT FOODS with interweek perspective.

Outlook for Friday: The bear is everywhere.

Free Press Journal

www.freepressjournal.in