Trade Setup for Next Week- Nifty and Bank Nifty trading view and key factors

 

Trade Setup for next week: The Indian equity market continued its northward journey and ended another week with gains. The Nifty is looking strong and currently trading almost six months high. The Bank Nifty has rallied almost 10% and outperformed the Nifty and Sensex last week. The market trend was positive and remained less volatile for all five days during the week. 

You can read complete last week’s market updates here

Technically Nifty is looking strong and the market is expected to start stable in the coming week. But traders should remain cautious ahead of macro data. The trade setup for next week and the key factors that will influence the market next week are given below.

 

Trade set up for next week and key factors 

 

Global Market cues

The Global market sentiments were positive last week and helped the domestic markets to trade higher. The  US markets gained last week, S&P 500, and Nasdaq touched a record high. The US market sentiments were positive due to the news flow of potential vaccine and treatment for COVID-19, the news of a new framework for inflation by Fed Reserve and Treasury yields increased. 

The European markets also closed higher last week on further stimulus in France and Germany, a recommitment by China-US to their Phase 1 trade deal, and signs of progress in the development of treatment for Coronavirus.

In Asian markets, Japan’s Nikkei was closed marginally lower last week as the news of Prime Minister Shinzo Abe’s resignation on Friday erased all earlier gains. The Chinese market rose last week as it has reported its July industrial profit jumps.

The global markets traded positively last week and supported the Indian markets to trade higher in the absence of any domestic trigger. Some important dates for global market macro data for trade setup in the coming week

Global Macro Data Next Week
31st Aug	Industrial Production	Japan
	Consumer Confidence	Japan
1st Sept	Manufacturing PMI	UK
	Manufacturing PMI	US
	Manufacturing PMI	China
03 Sept	Jobless Claim	US

 

Indian Macroeconomic data

The Indian macroeconomic data will play a vital role to decide the direction of the market in the coming week. The traders will trade with a cautious approach on Monday as Infrastructure output data for July and GDP data for the April-June end quarter data are expected at the end of the day. The Indian GDP is expected to contract in double-digit in the first quarter in FY21 due to strict lockdown. 

Other macroeconomic data that are going to announce in the coming week are given below.

Macro Data Next Week
31st Aug	Government Budget Value
	Infrastructure Output
	GDP for April-June
1st Sept	Markit Manufacturing PMI
3rd Sept	Markit Service PMI
4th Sept	Foreign Exchange Reserve

 

Coronavirus updates

Indian coronavirus cases crossed 35L with new cases registered 78,761 on 29th August. The recovery rate has been increased from 71% to 76.74% in the last seven days. Worldwide the coronavirus cases are registered around 2.45 cr. At present, though the infection has declined in the US while in Europe the new surge has worried the investors.

Last week the global market gains on the news flow about potential vaccines and treatments for Coronavirus infection. In India, the Serum Institute on Tuesday has started its human trail of the “Covishield” vaccine which is jointly developed by the University of Oxford and AstraZeneca.

Further, the decision of unlocks 4.0 from 7th September will be positive for the Indian market. The relaxation to start of metro rail, a large gathering with a ceiling of 100 people, no restrictions on interstate movements will help the Indian economy to grow faster.

Auto Sales numbers

Automobiles and auto ancillary stocks would be in focus in the coming week as Auto sales numbers for August are expected on September 1st. The market analysts are expected better numbers this time due to unlocks and an increase in demand. 

It is expected that rural Auto demand has increased due to the above-average monsoon. The two-wheeler and passenger vehicle sales are also expected to improve due to the relaxation of lockdown. However, the demand for consumer vehicles may be muted during the month of August 2020.

The positive auto sales and better than expected sales numbers can cheer the market mood of Tuesday and Wednesday in the coming week.

 

Technical levels: Trade setup for Nifty and Bank Nifty share price

Nifty futures trade setup for next week

Primary Trend of Nifty share price futures next week: Positive

Range-Bound Trend of Nifty futures: All up Moves Initiates Profit Booking (Sale) @ 11800 whereas All Down Moves Initiates Short Covering (Buy) @ 11620

If Nifty share price in futures Moves Above 11715 and sustain. Then you should Buy with 1st Target of 11738 during the day or week with a Stop Loss of 11655 FOR the Target of 11738 – 11755- 11802- 11851

Suppose Nifty share price in futures Moves Below 11655 and sustain. Then you should Sell with 1st Target of 11619 during the day or week with a Stop Loss of 11715. FOR the Target of 11619-  11590- 11562-11514

Bank Nifty futures trade setup for next week

Primary Trend of Bank Nifty share price in future for next week: Positive

Range-Bound Trend of Bank Nifty share price in future: All up Moves Initiates Profit Booking (Sale) @ 25300, whereas All Down Moves Initiates Short Covering (Buy) @ 24250

Bank Nifty share price in future Moves Above 24602 and sustain. Then you should Buy with the 1st Target of 24925 during the day with a Stop Loss of  24246. FOR the Target of 24925 – 25125- 25320- 25850

If Bank Nifty share price in future Moves Below 24246 and sustained. Then you should Sell with the 1st Target of 24070 during the day with a Stop Loss of 24602. FOR the Target of 24070 – 23870- 23540 – 23220

 

FIIs and DIIs movement

FIIs were the buyers and DIIs were the seller in the cash segment last week. On a monthly basis, the FIIs bought Rs 19145.35 cr and DIIs sold Rs 11727.66 cr in the cash segment. FIIs are purchasing continuously for the last four months whereas DIIs are selling for the last two months in a row in the cash segment.

In the last four months, FIIs pumped in Rs 41042.98 cr in the domestic market whereas DIIs sold  Rs 21735.54 cr in the last two months in the cash segment. As fas as FIIs are on the buying side Indian market trend would remain positive.

 

Quarterly Earnings

There are around 300 plus midcap and smallcap companies will announce their Q1FY21 quarterly earnings in the coming week. ONGC and Coal India will also announce their June end quarterly earnings on 1st and 2nd September respectively. The midcap and smallcap sectors can see some momentum on the quarterly earnings next week.

 

Conclusions:

We have mentioned above key factors that will influence the Indian markets in the next week and help the traders to set up their trades. The traders can also follow our Daily Live share market updates and Nifty and Bank Nifty futures technical levels on our website.

 

You may also like to read, Coronavirus impact on various sectors & Indian economic growth

10 Best Stock Market books to read while in lockdown

Happy Investing!!

Editor’s Desk