Anil Singhvi’s Strategy May 4: Metals, Auto, Oil & Gas, FMCG, Bank and NBFC sectors are Negative

Editor’s Take: Sell in May Go Away

Why the market will fall in May?

-- Fear of tariff war between the US and China again.
-- Tariff war will create pressure on metal and auto shares.
-- Huge drop in crude is possible. 
-- Warren Buffet is waiting for a big fall. 
-- Corona wreaked havoc worldwide.
-- Lockdown 3.0 implemented. It will take time to open big cities.
-- Announcement of Relief package may be delayed.  
-- HUL result is providing the signs of recession.
-- Reliance's rights issue is not attractive.
-- Market turns expensive after rising 30% in April.

What should be done?

Strong selling zone is 9,800-10,150 and strong support zone is 8.800-9,000.

Fall up to 8,000-8,300 is expected.

May 4, 2020, strategy: 

Amid domestic institutional investors (DIIs), neutral foreign institutional investors (FIIs), and negative global market, futures & options (F&O) and sentiment cues, the short-term trend of the Indian stock markets will be Positive on Monday, May 4, 2020.

At the stock markets, the Sensex at the Bombay Stock exchange shot up 997.46 points, or 3.05 per cent, to close at 33,717.62, on Thursday, April 30, 2020. The Nifty at the National Stock Exchange zoomed 306.55 points, or 3.21 per cent, to end at 9,859.90. Bank Nifty gained 444.30 points, or 2.11 per cent to close at 21,534.50. Trading was volatile on account of the monthly F&O expiry.

Zee Business's Managing Editor Anil Singhvi's Market Strategy for May 4:

Nifty 9,200-9,400 Important Support Range below that 8,800-9,000 Strong Support Zone.

Higher selling range on Nifty is 9,550-9,850.

Bank Nifty 20,500-20,700 is Important Support Range below that 20,100-20,300 and 19,400-19,700 Strong Support Zone.

Higher Selling Range on Bank Nifty is 21,350-21,550.

Put-Call Ratio (PCR) alarming at 1.89, Be alert at a higher level, the Volatility Index (VIX) is 33.99.

For Existing Long Positions:

Nifty intraday and closing stop loss 9,500.

Bank Nifty intraday and closing stop loss 21,000.

For Existing Short Positions:

Nifty intraday and closing stop loss 9,550

Bank Nifty intraday and closing stop loss 21,550

For New Positions:

Sell Nifty with a stop loss of 9,550 and target 9,400, 9,325, 9,275, 9,200, 9,150. 

Buy Nifty in 9,150-9,300 range with a stop loss of 9,000 and target 9,400, 9,500. 

Sell Bank Nifty with a stop loss of 21,100 and target 20,700, 20,500, 20,300, 20,100.

Sector

Negative: Metals, Auto, Oil & Gas, FMCG, Banks and NBFCs.

Result Review:

Sell HUL Futures: Stop loss 2,205 and target 2,050, 2,010. 7% Negative Volume growth is a big worry.

RIL Futures: 1,365-1,400 lower range, 1,500 higher level. Rights issue price not attractive. Higher GRM is not sustainable.

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