Trading Strategies and key factors to impact Nifty and Bank Nifty futures next week.

 

The Nifty and Bank Nifty futures trading strategies for the next week will depend on various factors. There are some news and events which are scheduled next week and may directly impact the trading strategy. You need to keep in mind the below key factors while trading on the below technical strategy.

So let us find out first what are the key factors that may impact the Nifty and Bank Nifty futures trading strategies next week.

 

Fiscal Stimulus ahead of Festive season

 

The Finance Minister Nirma Sitharaman has confirmed last week about the new economic stimulus package would be announced soon by the government. The economic package would boost job growth, demand, and consumer spending. 

The FM Nirmala Sitharaman said the government has an open mind on the stimulus package and the decision on when to announce the package and how much spend will be taken at an appropriate time. The street is expecting the announcement of the Stimulus package ahead of the festive season. Any decision on this issue next week can boost the market sentiments and can see a strong rally.

 

Macro data

 

The next week macroeconomic data that are going to announce are 

Macro Data Next Week
6th Oct	Markit Service PMI
9th Oct	Foreign Exchange Reserve
	Bank loan growth
	Deposit growth

 

2nd Quarterly Results

 

The 2nd quarterly (July-Sept) earning season has started. The results are expected to be better compared to the 1st quarter due to relaxation in lockdown. TCS is going to announce its 2nd quarter result on 7th October 2020. We may see some movement in the IT index which can impact the Nifty 50 index due to its weightage.

 

Interest Waiver Case

 

The government on Friday 2nd October informed the Supreme Court that it has decided to waive only “interest on interest” on loans up to 2 cr during the six months moratorium period. This would give a big relief to retail and MSME borrowers like MSME loans, auto loans, personal loans, housing loans, consumer loans, credit card dues, etc.

The government is also likely to pass on the benefits to those who have paid their dues on time According to the TOI, the cost of interest on interest waiver on the above-mentioned categories of borrowers will be to the tune of only Rs 5000-Rs6000 crore. The government is also likely to compensate banks for such an interest waiver.

However, some more clear pictures are expected in the next week. Traders should remain cautious on this front as the related news may directly impact the banking and financial stocks which have got a major weightage in benchmark indices.

 

Global Cues

 

Last week the Indian markets gained with the help of global cues. The European markets were closed higher last week amid concerns about rising coronavirus cases in Europe. The news of Trump and his wife contracted COVID-19 has created panic in the US market on Friday. 

In the US, the political atmosphere has created uncertainty in the market whereas European traders are concern about the second wave of coronavirus and trade talks between Europe and the UK. The US and European markets may remain volatile in the coming week. 

In Asia, the Chinese market will be closed till 8th October due to the National holiday. Almost all major markets will have their Service PMI data in the next week. Other then this there are no major macroeconomic data that will be announced next week.

 

Important Global Macro Data Next Week
5th Oct	Jibun Bank Service PMI	Japan
	Service PMI	UK/US
7th Oct	FOMC minutes	US
9th Oct	Service PMI	China
	Industrial Production/GDP	UK

Coronavirus news

 

India recorded more than 65 lakh confirmed coronavirus cases with a spike of 75,829 new cases and 940 deaths in the last 24 hours as per TOI. There are a total of 9,37,625 active confirm coronavirus cases and more than 1 lakh people death. Compared to last week the daily basis active coronavirus cases reduced almost 20-25%.

On the global front, In Europe, the second wave of coronavirus cases remained a concern for the market. In the last week, the US President Donald Trump and his wife contracted Covid-19 just a few weeks ahead of the election. The news has created panic in the US market and the market closed lower on the last day of the week.

Union Health Minister Dr. Harsh Vardhan has said that the first vaccine will be available in India in the first quarter of 2021. In India, three vaccines are on Phase-II/III clinical trial stage and are at present showing a positive response. 

The details of vaccine-related queries will be answered by the Health Minister on Sunday 4th October at 1 PM. Any positive news in this front can boost the market sentiments next week.

 

Nifty and Bank Nifty futures trading strategies for next week (5th-9th Oct)

 

 

Nifty futures trading strategy for next week

Primary Trend of Nifty futures next week: Positive

Range-Bound Trend of Nifty futures: All up Moves Initiates Profit Booking (Sale) @ 11560 whereas All Down Moves Initiates Short Covering (Buy) @ 11370

If Nifty share price in futures Moves Above 11476 and sustain. Then you should Buy with 1st Target of 11497 during the day or week with a Stop Loss of 11408 FOR the Target of 11497- 11514- 11555- 11614

Suppose Nifty share price in futures Moves Below 11408 and sustain. Then you should Sell with 1st Target of 11390 during the day or week with a Stop Loss of 11476. FOR the Target of 11390- 11370- 11342-11306

 

Bank Nifty futures trading strategy for next week

Primary Trend of Bank Nifty future for next week: Positive

Range-Bound Trend of Bank Nifty share price in future: All up Moves Initiates Profit Booking (Sale) @ 23200, whereas All Down Moves Initiates Short Covering (Buy) @ 21800

Bank Nifty share price in the future Moves Above 22560 and sustain. Then you should Buy with the 1st Target of 22690 during the day with a Stop Loss of  22120. FOR the Target of 22690 – 22820- 23170- 23430

If Bank Nifty shares price in the future Moves Below 22120 and sustained. Then you should Sell with the 1st Target of 22020 during the day with a Stop Loss of 22560. FOR the Target of 22020 – 21792- 21620 – 21500

 

FIIs and DIIs movement

 

FIIs were the seller and DIIs were buyers in the cash market segment last week. In the month of September FIIs sold more than 11000 crores but was the buyer on the first day of October.

On 1st October FIIs bought Rs 1632.25 crores whereas DIIs also bought Rs 259.46 crores in the cash segment. Hope the FIIs buying spree will continue in the month of October 

 

Conclusions:

The above key factors will directly or maybe indirectly decide the market trend next week. And if we keep these factors in our mind while implementing the trading strategies then we can definitely improve our profit ratio. So next week when you are trading in Nifty and Bank Nifty futures on above technical levels always keep in mind the above key factors.

 

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Happy Investing!!

Editor’s Desk

 

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