Volatility is the price longtime Nifty bulls have to pay for the benchmarks’ outsized returns!

*Morning Action @ 7 AM – Wednesday, September 4th 2024*

# Gift Nifty receives its first drubbing of the month after weak overnight Wall Street cues on backdrop of downbeat readings on the US manufacturing activity that spooked the bulls.

# Expect volatility to be the hallmark of today’s trading at Dalal Street and that’s in line with our call of the day which says volatility is the price longtime Nifty bulls have to pay for the benchmarks’ outsized rewards.

*7:00 AM GLOBAL UPDATE:*
# GIFT Nifty 🇮🇳: (-201, 25167)
# Dow Futures: (-167, 40772)
# Nasdaq 100 Futures (-132, 18827)

# Nikkei (-1375, 37311)
# Hang Seng (-177, 17475)

# Dow Jones (-626, 40937)
# Nasdaq (-577, 17136)
# Bovespa (-553, 134353).

MARKET TRENDS:
# Global: Negative
# FII: Positive (+1029.25 Cr)
# DII: Positive (+1896.21 Cr)
# Sentiment: Risky
# Market Breadth: Neutral
# Technicals: Overbought zone
# F&O: 24000 – 25500 zone.

# INDIA VIX 13.84 (-1.56%)
# Nifty PCR (26th Sept) 1.50
# Bank Nifty PCR (25th Sept) 1.05

# Nifty Outlook: Nifty may hit the pause button.

# WHAT TECHNICALS TELLS US ON NIFTY & BANK NIFTY:

Nifty Technically:
Nifty (CMP: 25280)
SUPPORT: 25121/24963
RESISTANCE: 25551/26000
RANGE: 25050-25350
BIAS: Neutral
21 DMA: 24653
50 DMA: 24510
200 DMA: 22565

Bank Nifty Technically:
BANK NIFTY (CMP 51689):
SUPPORT: 50713/50100
RESISTANCE: 52000/52350
RANGE: 51000-52000
BIAS: Positive
21 DMA: 50678
50 DMA: 51531
200 DMA: 48354

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

# Wall Street kicked off September on jittery note as trading resumes after the Labor Day holiday.

# The Dow Jones index declined 1.5% to 40,936, while the broader S&P 500 fell 2.1% to 5,528. The tech-heavy Nasdaq Composite tumbled 3.3% to close at 17,136.

# Nvidia lost 9.5% on Tuesday, shedding $279 billion in market value in the process.

# There were worries about growth. the latest update on US manufacturing has brought fear about a recession back to the surface.

# The Institute for Supply Management’s Purchasing Managers Index, or PMI, came in at a reading of 47.2, up from July’s 46.8, but economists surveyed by FactSet expected a reading of 47.5.

A number above 50 indicates growth. The August reading is the fifth consecutive month of contraction. The March PMI came in at 50.3. That March growth blip is the only reason the U.S. manufacturing economy hasn’t contracted for 22 consecutive months.

# The street now looks ahead to a key August monthly jobs report this Friday as the Fed turns its attention to rising labor market risks.

# WTI Oil futures tumbles below the $70 per barrel.

# COMEX Gold consolidates near $2495 per ounce. Please note, Gold prices are up more than 21% for the year to date.

 

 

NEED TO KNOW:

# This Wednesday morning, there are two good news and one bad news:

# First, the bad news:

1) Wall Street traded with negative bias in overnight trade on worries about growth. The latest update on US manufacturing has brought fear about a recession back to the surface.

# Now, the two good news:

1) WTI oil prices have tumbled below to $71 a barrel, the lowest in eight months as muted demand magnified the impact of relatively ample supply.

2) In yesterday’s muted session, the FIIs bought again to the tune of Rs. 1029 crores.

# That brings us to our call of the day which suggests for markets to bounce, Nifty and Sensex need to move above their new historic all-time-highs which are placed at 25333.65 and 82725.28 respectively.

# Technically, confirmation of strength only above Nifty 25334 mark. Until, then it is safe to assume that markets are likely to struggle.

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

# Long story short: Nifty’s 14 straight sessions of winning streak will be put to test in today’s session.

Nifty is most likely to hit the pause button…

# Meanwhile, Defence ministry approves 10 proposals worth Rs 1.45 lakh crore. The tender is expected to involve Category A shipyards such as Mazagon Dock Shipbuilders, Garden Reach Shipbuilders and Engineers Limited, Goa Shipyard Limited, and Larsen & Toubro.

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

Nifty (25280): Buy between 25000-25050 zone. Stop at 24789. Zone. Targets 25350/25551. Aggressive targets at 25750-26000 zone.

Bank Nifty (51689): Buy between 51100-51300 zone. Stop at 50651. Targets 51750/52000. Aggressive targets at 52500-53000 zone.

# Our chart of the day is bearish/negative on JINDAL STEEL & POWER, DLF and BHEL on any intraday strength with an interweek perspective.

# The 1 stock to buy right now:

Buy SBI LIFE (CMP 1929): Buy between 1875-1890 zone. Stop at 1823. Targets 1957/1975. Aggressive targets at 2029. (Interweek Strategy). Rationale: Momentum oscillators turning bullish. Higher high/low.

Trader Premium Services

Investor Premium Services

*Disclaimer:* This does not construe to be an investment advice. Stock market investments are subject to market risks. All information is a point of view, and is for educational and informational use only. The author accepts no liability for any interpretation of articles or comments on this platform being used for actual investments. Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.