Pre Market Report 30-Aug-2024

Summary

In this pre-market report, PR Su discusses the mixed US market close with the Dow Jones up and NASDAQ down, mainly due to Nvidia's results. He notes the US VIX fell 8.5% and Asian markets are positive, hinting at a bullish trend. He advises traders to be cautious on the first trading day of the month, which often sets the tone for the month. Su highlights technical indicators suggesting a long position for Nifty above 24975, with potential resistance around 26,000. He also mentions that despite Bank Nifty's underperformance, FMCG and Pharma sectors are performing well. Su recommends a 'buy on dip' strategy rather than 'sell on rally', and suggests selling put options below 24500 with a stop loss for options traders.

Takeaways

• 📈 The US markets ended mixed with the Dow Jones Industrial Average (DJIA) up and the NASDAQ down, primarily due to Nvidia's results.
• 📉 The US VIX index, a measure of market volatility, fell by 8.5%, indicating a decrease in market fear.
• 🌏 Asian markets are mostly positive, and the NIFTY index, which is India's benchmark, is also showing slight positive signs.
• 📊 Historical observation suggests that the first trading session of the month often sets the tone for the rest of the month, especially if the market is in an uptrend.
• 📌 Nifty's technical indicator suggests a long position if it crosses 24975, while Bank Nifty requires a breakout above 51,800 to enter a long position.
• 💊 The FMCG and Pharma sectors performed well yesterday due to bonus news from Reliance Industries and other stocks.
• 💰 Foreign institutional investors (FII) and domestic institutional investors (DII) were aggressive buyers, which is typically a bullish signal for the market.
• 🚫 The speaker advises against going long immediately as Nifty is already significantly above the long entry point, to avoid potential losses if the market dips.
• 📉 The speaker suggests a strategy of buying on dips rather than selling on rallies, given the current market conditions.
• 💡 Technically and fundamentally, the markets are looking bullish in the short term, despite potential medium to long-term concerns.
• 🔢 The speaker provides potential support and resistance levels for Nifty, with the first support at 24800 and the major resistance around 26,000 for the September series.
• ⚔ For options traders, the speaker recommends selling put options below 24500 with an appropriate stop loss, as a strategy for the current market trend.

Q & A

What was the outcome of the US markets mentioned in the report?

The US markets ended mixed, with the Dow Jones Industrial Average (DJIA) being higher and the NASDAQ being down, dragged by Nvidia's results.

What is the significance of the US VIX index movement mentioned in the report?

The US VIX index, which measures market volatility, fell by 8.5%, indicating a decrease in market volatility.

What is the general trend observed in Asian markets according to the report?

Asian markets are mostly positive, with the GIFT NIFT indicating a slight positive opening.

Why is the first trading session of the month considered significant?

The first trading session of the month is considered significant because it often sets the trend for the rest of the month, especially if the market is already in an uptrend.

What was the Nifty's performance in the last month's first trading session?

In the last month, the Nifty closed around 24400 in July Series, and in August Series, the first trading session saw the Nifty rise by 400 points.

What is the current technical outlook for Nifty according to the report?

Technically, Nifty is considered long if it crosses 24975, and the report suggests that the market is currently bullish.

What is the fundamental outlook for the market based on the report?

Fundamentally, the market is looking bullish as both F&O and DIIs have been aggressive buyers, with a total purchase of 6,000 crores.

What is the recommended trading strategy for the day according to the report?

The report suggests a 'buy on deep market' strategy rather than 'sell on rally', and advises traders to avoid taking positions in the first half of the day.

What are the identified support levels for Nifty if one is selling options?

The identified support levels for Nifty are 24800, 24650, and 24500, with the suggestion to sell options below 24500 or at 24500 and below.

What is the projected target for the next series according to the report?

The report suggests that 26,000 may be the target for the next series, which is the September Series.

What is the current performance of Bank Nifty compared to the overall market?

Bank Nifty has been underperforming and is considered weak since the budget day, but this weakness is compensated by other sectors.

What is the major support level mentioned for the market?

The major support level mentioned for the market is at 24500.

What is the major resistance level mentioned for the market?

The major resistance level mentioned for the market is around 26,000.

What advice is given regarding stop-loss when trading?

The advice given is to always trade with a strict stop-loss, although the speaker mentions managing positions through various methods rather than relying solely on stop-losses.