The trading theme has changed quickly from the optimism about cooling US inflation towards fears over a slowdown in the US economy…

*Morning Action @ 7 AM – Friday, September 6th 2024*

# Gift Nifty is pointing to an extremely weak start indicating Nifty to struggle for direction and on track for a skittish trading for the 3rd straight day.

*7:00 AM GLOBAL UPDATE:*
# GIFT Nifty 🇮🇳: (-111, 25145)
# Dow Futures: (-51, 40705)
# Nasdaq 100 Futures (-135, 18796)

# Nikkei (-16, 36641)
# Hang Seng (-13, 17444)

# Dow Jones (-219, 40756)
# Nasdaq (+43, 17128)
# Bovespa (+392, 136502).

MARKET TRENDS:
# Global: Negative
# FII: Negative (-688.69 Cr)
# DII: Positive (+2970.74 Cr)
# Sentiment: Bearish
# Market Breadth: Negative
# Technicals: Overbought zone
# F&O: 24000 – 25500 zone.

# INDIA VIX 14.20 (-1.25%)
# Nifty PCR (26th Sept) 1.59
# Bank Nifty PCR (25th Sept) 0.98

# Nifty Outlook: Nifty could extend its slide.

# WHAT TECHNICALS TELLS US ON NIFTY & BANK NIFTY:

Nifty Technically:
Nifty (CMP: 25145)
SUPPORT: 24963/24751
RESISTANCE: 25335/26000
RANGE: 24950-25250
BIAS: Neutral/negative
21 DMA: 24762
50 DMA: 24572
200 DMA: 22621

Bank Nifty Technically:
BANK NIFTY (CMP 51473):
SUPPORT: 50713/50100
RESISTANCE: 51750/52350
RANGE: 50700-51700
BIAS: Neutral/negative
21 DMA: 50822
50 DMA: 51503
200 DMA: 48428

 

*WHAT EXACTLY HAPPENED AT WALL STREET IN OVERNIGHT TRADE:*

# In Thursday’s trade, the trading theme revolved around data from ADP showed that private payrolls rose by 99,000 in August, the slowest increase since 2021.

# This renewed recession fears with the key benchmarks already struggling on backdrop of weak manufacturing data which was rattling the market sentiments.

# Investors are anxiously awaiting Friday’s US August jobs report for more insight into how the labor market is really holding up. A lukewarm report could send recession fears spiking and stocks spiralling.

On the flip side, a resilient report would be welcome for stock markets across the globe. The perma-bulls are hoping for a soft landing for the US economy to keep rolling.

# Meanwhile, Tesla’s gain helped the Nasdaq Composite finish the day up 0.3% at 17,127. The S&P 500 ended with a modest 0.3% loss to 5,503, while the Dow Jones fell 0.5% to 40,755.

# WTI Oil futures continue to trade below the $70 per barrel.

# COMEX Gold improves towards $2515 per ounce. Please note, Gold prices are up more than 21% for the year to date.

 

NEED TO KNOW:

It’s unbelievable, the catalysts at stock markets changes so quickly that investors do not even know how it happened so suddenly!

Yes, the trading theme has changed quickly from the optimism about cooling US inflation towards fears over a slowdown in the US economy…

Expect Nifty to trade skittish as all eyes turn to August US jobs report.

# Heading into the opening bell, Gift Nifty is seen trading deep in red.

# The negative catalyst:

Wall Street falls hard in overnight trade.

Blame it on August’s private payrolls which were significantly below economists’ estimates, while weekly jobless claims declined.

# The street is actually worried that growth in the US is actually slowing.

# Wall Street is starting to acknowledge the possibility that things could get worse than the rosiest of outlooks.

# We will spy with one big eye and check if the Federal Reserve is behind the curve or not?

# Investors will now brace for August US jobs report which will be released on Friday, September 6.

This NFP will provide the next major test for the stock market.

# Bottom-line: Expect Nifty to trade skittish for the day.

# Reliance Industries board has approved bonus share issue in 1:1 ratio, the first bonus issue since 2017, when its stock price was roughly Rs 700. This will also be Reliance’s sixth bonus issue since listing.

# Shares of Avenue Supermarts (DMart) hit a two-year high of Rs 5,361, on hopes of improvement in discretionary demand and margins.

# Now, here is the preferred trade on Nifty and Bank Nifty:

Nifty (25145): Sell at CMP. Stop at 25789. Zone. Targets 24963/24751. Aggressive targets at 24000-24250 zone.

Bank Nifty (51473): Sell at CMP. Stop at 52151. Targets 51000/50713. Aggressive targets at 50100-50250 zone.

# Our chart of the day is bearish on DIXON TECHNOLOGY, DLF and DR REDDYS LAB on any intraday strength with an interweek perspective.

# The 1 Stock to Sell Right Now:

Sell DIXON (CMP 12412): Sell at CMP. Stop at 13100. Targets 11700/11251. Aggressive targets at 10751. (Interweek Strategy). Rationale: Weakening momentum. Signaling a breakdown.

 

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