Category: Stock Trading

Dow futures rise 300 points as Trump administration begins transition – CNBC

U.S. stock futures climbed early Tuesday in relief over the Trump administration’s move to begin the transition process.

Futures on the Dow Jones Industrial Average rose 308 points, or 1%. S&P 500 futures gained 0.8% and Nasdaq 100 futures added 0.3%.

The move higher in futures came after General Services Administration chief Emily Murphy told President-elect Joe Biden that the Trump administration is making federal resources available for his transition into office.

Trump tweeted that he approved of the move, but said he will “keep up the good fight” even as his reelection campaign has so far failed to win any legal victories that would invalidate votes for Biden.

Stocks kicked off the Thanksgiving week on a high note on Monday as investors piled into reopening trades amid vaccine optimism. The Dow rose more than 300 points for its best day in a week, while the S&P 500 climbed 0.6%. The tech-heavy Nasdaq Composite underperformed with just a 0.2% gain.

The small-cap Russell 2000 jumped 1.9% to another record high amid the rotation into beaten-down companies.

Investors cheered more promising developments on the Covid-19 vaccine front. AstraZeneca said interim analysis showed its vaccine has an average efficacy of 70%, following strong results from Pfizer-BioNTech and Moderna.

Major averages hit their session highs after news broke that Joe Biden will nominate former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Many view Yellen as a market-friendly pick considering that she oversaw a long economic expansion with historically low-interest rates and she’s likely to push for further fiscal stimulus.

“I think this is a strong sign that Biden will be focused on rebuilding the economy vs. pursuing aggressive regulatory policy,” said Ed Mills, Washington policy analyst at Raymond James. “She will be an effective voice of more fiscal support vs. someone who was seen as a partisan … I would say that is a positive development for the market, but more importantly for the economy as a whole.”

Still, investors weighed vaccine news against a resurgence in new coronavirus cases, which prompted some Wall Street firms including Goldman Sachs and JPMorgan to lower their near-term economic outlook.

The U.S. continues to notch record Covid-19 infections, with the national seven-day average of daily new cases hitting 170,855 on Sunday, according to a CNBC analysis of Johns Hopkins University data.

Investors will monitor a slew of earnings from retailers ahead of the holiday season, including Best Buy and Dick’s Sporting Goods before the bell as well as Gap and Nordstrom after the close Tuesday.

U.S. markets will be closed for the Thanksgiving holiday on Thursday and will have a short session on Friday.

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Dow rallies more than 400 points to surpass 30,000 for the first time – CNBC

The Dow Jones Industrial Average rallied on Tuesday, breaking above 30,000 for the first time amid positive vaccine news, hope for a strong economic recovery in 2021 and easing of political uncertainty as the Trump administration approved the start of the presidential transition.

The 30-stock Dow advanced 448 points, or 1.5%. At its high of the day, it traded at 30,116.51. Chevron rose more than 4% to lead the Dow higher. JPMorgan Chase and American Express each gained more than 3%.

“This is yet another reminder of how far stocks and the economy have come since the depths of March,” said Ryan Detrick, chief market strategist at LPL Financial, about the Dow’s milestone. “Although 30,000 isn’t much different than 29,999, there is something special about those big milestone numbers.”

Meanwhile, the S&P 500 climbed 1.5%, putting it on pace for a record closing high, and the Nasdaq Composite advanced 1%.The small-cap Russell 2000 also hit an all-time high.

Tuesday’s gains put the Dow up more than 13% for the month, which would be its biggest monthly gain since 1987. The S&P 500 and Nasdaq are up 11.2% and 10.1%, respectively, in November. It would be the Nasdaq’s and S&P 500’s best monthly performances since April.

The Dow’s rally to record levels has been driven in part by investors increasing their exposure to beaten-down value names. On Tuesday, the iShares Russell 1000 Value ETF (IWD) gained 2.2% and outperformed its growth counterpart, which advanced 0.9%.

“I think you’re seeing a bit of a catch-up trade” in value stocks, said George Catrambone, head of Americas trading at DWS. “You had investors riding five stocks for a very long period of time. Now they’re giving way to 495 others.”

Value stocks have been on fire this month as a slew of positive coronavirus vaccine data raised expectations for a swift economic recovery.

AstraZeneca said Monday interim analysis showed its vaccine has an average efficacy of 70%. Earlier this month, Pfizer and BioNTech also posted strong vaccine data along with Moderna.

Traders also cheered on Tuesday the increasing political clarity after General Services Administration chief Emily Murphy told President-elect Joe Biden that the Trump administration is making federal resources available for his transition into office.

President Donald Trump tweeted that he approved of the move, but said he will “keep up the good fight” even as his reelection campaign has so far failed to win any legal victories that would invalidate votes for Biden. Trump’s legal team also suffered another blow on Tuesday after Pennsylvania certified Biden’s win over Trump in the state.

Meanwhile, Biden will nominate former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Many view Yellen as a market-friendly pick considering that she oversaw a long economic expansion with historically low-interest rates and she’s likely to push for further fiscal stimulus.

“I think this is a strong sign that Biden will be focused on rebuilding the economy vs. pursuing aggressive regulatory policy,” said Ed Mills, Washington policy analyst at Raymond James. “She will be an effective voice of more fiscal support vs. someone who was seen as partisan … I would say that is a positive development for the market, but more importantly for the economy as a whole.”

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Dow surges more than 400 points, closes above 30,000 for the first time ever – CNBC

The Dow Jones Industrial Average rallied on Tuesday, breaking above 30,000 for the first time amid positive vaccine news, hope for a strong economic recovery in 2021 and easing of political uncertainty as the Trump administration approved the start of the presidential transition.

The 30-stock Dow surged 454.97 points, or 1.5%, to close at 30,046.24. At its high of the day, it traded at 30,116.51. Chevron rose 5% to lead the Dow higher. JPMorgan Chase and Goldman Sachs rose 4.6% and 3.8%, respectively.

“This is yet another reminder of how far stocks and the economy have come since the depths of March,” said Ryan Detrick, chief market strategist at LPL Financial, about the Dow’s milestone. “Although 30,000 isn’t much different than 29,999, there is something special about those big milestone numbers.”

Meanwhile, the S&P 500 climbed 1.6% to 3,635.41, notching a record close, and the Nasdaq Composite advanced 1.3% to 12,036.79. The small-cap Russell 2000 also hit an all-time high, gaining 1.9% to end the day at 1,853.53.

Tuesday’s gains put the Dow up more than 13% for the month, which would be its biggest monthly gain since 1987. The S&P 500 and Nasdaq are up 11.2% and 10.3%, respectively, in November. It would be the Nasdaq’s and S&P 500’s best monthly performances since April.

The Dow’s rally to record levels has been driven in part by investors increasing their exposure to beaten-down value names. On Tuesday, the iShares Russell 1000 Value ETF (IWD) gained 2.1% and outperformed its growth counterpart, which advanced 1%.

“I think you’re seeing a bit of a catch-up trade” in value stocks, said George Catrambone, head of Americas trading at DWS. “You had investors riding five stocks for a very long period of time. Now they’re giving way to 495 others.”

Value stocks have been on fire this month as a slew of positive coronavirus vaccine data raised expectations for a swift economic recovery.

AstraZeneca said Monday interim analysis showed its vaccine has an average efficacy of 70%. Earlier this month, Pfizer and BioNTech also posted strong vaccine data along with Moderna.

Traders also cheered on Tuesday the increasing political clarity after General Services Administration chief Emily Murphy told President-elect Joe Biden that the Trump administration is making federal resources available for his transition into office.

President Donald Trump tweeted that he approved of the move, but said he will “keep up the good fight” even as his reelection campaign has so far failed to win any legal victories that would invalidate votes for Biden. Trump’s legal team also suffered another blow on Tuesday after Pennsylvania certified Biden’s win over Trump in the state.

Meanwhile, Biden will nominate former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Many view Yellen as a market-friendly pick considering that she oversaw a long economic expansion with historically low-interest rates and she’s likely to push for further fiscal stimulus.

“I think this is a strong sign that Biden will be focused on rebuilding the economy vs. pursuing aggressive regulatory policy,” said Ed Mills, Washington policy analyst at Raymond James. “She will be an effective voice of more fiscal support vs. someone who was seen as partisan … I would say that is a positive development for the market, but more importantly for the economy as a whole.”

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Dow futures rise 200 points as Trump administration begins transition process – CNBC

Stock futures climbed in overnight trading on Monday following a strong session on Wall Street boosted by positive vaccine news.

Futures on the Dow Jones Industrial Average gained 200 points. S&P 500 futures rose 0.6% and Nasdaq 100 futures climbed 0.4%.

The move higher in futures came after General Services Administration chief Emily Murphy told President-elect Joe Biden that the Trump administration is making federal resources available for his transition into office.

Trump tweeted that he approved of the move, but said he will “keep up the good fight” even as his reelection campaign has so far failed to win any legal victories that would invalidate votes for Biden.

Stocks kicked off the Thanksgiving week on a high note on Monday as investors piled into reopening trades amid vaccine optimism. The Dow rose more than 300 points for its best day in a week, while the S&P 500 climbed 0.6%. The tech-heavy Nasdaq Composite underperformed with just a 0.2% gain.

The small-cap Russell 2000 jumped 1.9% to another record high amid the rotation into beaten-down companies.

Investors cheered more promising developments on the Covid-19 vaccine front. AstraZeneca said interim analysis showed its vaccine has an average efficacy of 70%, following strong results from Pfizer-BioNTech and Moderna.

Major averages hit their session highs after news broke that Joe Biden will nominate former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Many view Yellen as a market-friendly pick considering that she oversaw a long economic expansion with historically low-interest rates and she’s likely to push for further fiscal stimulus.

“I think this is a strong sign that Biden will be focused on rebuilding the economy vs. pursuing aggressive regulatory policy,” said Ed Mills, Washington policy analyst at Raymond James. “She will be an effective voice of more fiscal support vs. someone who was seen as a partisan … I would say that is a positive development for the market, but more importantly for the economy as a whole.”

Still, investors weighed vaccine news against a resurgence in new coronavirus cases, which prompted some Wall Street firms including Goldman Sachs and JPMorgan to lower their near-term economic outlook.

The U.S. continues to notch record Covid-19 infections, with the national seven-day average of daily new cases hitting 170,855 on Sunday, according to a CNBC analysis of Johns Hopkins University data.

Investors will monitor a slew of earnings from retailers ahead of the holiday season, including Best Buy and Dick’s Sporting Goods before the bell as well as Gap and Nordstrom after the close Tuesday.

U.S. markets will be closed for the Thanksgiving holiday on Thursday and will have a short session on Friday.

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Dow futures rise more than 200 points as Trump administration begins transition process – CNBC

Stock futures climbed in overnight trading on Monday following a strong session on Wall Street boosted by positive vaccine news.

Futures on the Dow Jones Industrial Average gained 260 points. S&P 500 futures and Nasdaq 100 futures traded in mildly positive territory.

The move higher in futures came after General Services Administration chief Emily Murphy told President-elect Joe Biden that the Trump administration is making federal resources available for his transition into office.

Trump tweeted that he approved of the move, but said he will “keep up the good fight” even as his reelection campaign has so far failed to win any legal victories that would invalidate votes for Biden.

Stocks kicked off the Thanksgiving week on a high note on Monday as investors piled into reopening trades amid vaccine optimism. The Dow rose more than 300 points for its best day in a week, while the S&P 500 climbed 0.6%. The tech-heavy Nasdaq Composite underperformed with just a 0.2% gain.

The small-cap Russell 2000 jumped 1.9% to another record high amid the rotation into beaten-down companies.

Investors cheered more promising developments on the Covid-19 vaccine front. AstraZeneca said interim analysis showed its vaccine has an average efficacy of 70%, following strong results from Pfizer-BioNTech and Moderna.

Major averages hit their session highs after news broke that Joe Biden will nominate former Federal Reserve Chair Janet Yellen to be Treasury Secretary. Many view Yellen as a market-friendly pick considering that she oversaw a long economic expansion with historically low-interest rates and she’s likely to push for further fiscal stimulus.

“I think this is a strong sign that Biden will be focused on rebuilding the economy vs. pursuing aggressive regulatory policy,” said Ed Mills, Washington policy analyst at Raymond James. “She will be an effective voice of more fiscal support vs. someone who was seen as a partisan … I would say that is a positive development for the market, but more importantly for the economy as a whole.”

Still, investors weighed vaccine news against a resurgence in new coronavirus cases, which prompted some Wall Street firms including Goldman Sachs and JPMorgan to lower their near-term economic outlook.

The U.S. continues to notch record Covid-19 infections, with the national seven-day average of daily new cases hitting 170,855 on Sunday, according to a CNBC analysis of Johns Hopkins University data.

Investors will monitor a slew of earnings from retailers ahead of the holiday season, including Best Buy and Dick’s Sporting Goods before the bell as well as Gap and Nordstrom after the close Tuesday.

U.S. markets will be closed for the Thanksgiving holiday on Thursday and will have a short session on Friday.

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Day Trading Now: Stock Too Expensive? Buy a Slice – Real Daily

The cost to build a diversified stock portfolio is often the highest barrier for new investors. The outlay required to buy a basket stocks is more than the dollars available.


Instead of buying a fixed number of shares, what if you could buy a fixed dollar amount of a basket of stocks? Robinhood and SoFi were the first brokers to offer that choice for investors.

It would cost $4,000 to buy one share of the top five stocks in the Nasdaq 100. Seventy-five percent of that simple portfolio would be in one stock — Amazon (AMZN).

Instead, Robinhood offers fractional shares for $1 or more. So, instead of a large overweight in one stock, an investor could buy the same dollar amount in fractional shares for an equal weight portfolio.

An investment of as little as $5 thus can buy equity ownership of the five largest companies in the world.

What made this option practical was the competition among brokers to attract traders. The enticement was lower stock trading commissions.

The $20 commission per trade at low cost brokers years ago kept getting lower until hitting zero in late 2019. Every broker from the established firms such as Schwab to the newest mobile platforms now offer commission-free trading.

The next step is for brokers to pay us to trade. We can only hope.

Schwab and Fidelity have recently joined the stock trading apps Robinhood and SoFi in offering slices of stocks or fractional shares. This provides opportunities for new and experienced investors.

For new investors, the dollar barrier to investing has dropped to $1. For more seasoned investors came the ability to build stock portfolios with weightings significantly different from indexes.

To build a share-based portfolio with 5% invested in Alphabet (GOOG) would require a total investment of $28,000 for each share of Alphabet purchased. To include Amazon at 5% would raise the total investment to $60,000.


Now the investor can choose the allocation to each stock and the total dollar amount to invest without constraints.

Learn by doing

Perhaps the greatest advantage of this new opportunity is for young investors without much money to invest. It gets them in the game.

You can paper trade to build experience before putting your dollars to work. Keep a record of when and what shares you would have bought to gain some confidence.

But it does not provide the influence of emotion. It is easy to say you would have held on through a market slide. It is entirely different to do it with your hard-earned dollars at risk.

It is said that fear and greed drive the market. Neither can be simulated with paper trading.

The downside may be the perception that stock ownership is akin to gambling rather than investing. The ease of use of stock trading apps, coupled with zero commissions and $1 fractional shares may promote day-trading over investing.

In the first half of 2020, SoFi trading volume increased over 300% and 35% of the volume was fractional shares. The trading volume increased far more than the number of accounts, indicating more short-term trading than long-term investing.


A stock trade today is only a couple of clicks away on your phone. That makes it seem like the latest viral mobile game.

The difference is the very real dollars put at risk.

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Frequent stock trading may mean your gains are treated as business income – Mint

During the current lockdown, a large number of individual investors became active online in the stock market, buying and selling shares and, at times, also derivatives, from the comfort of their homes. This has been reflected in the large number of individual broking and demat accounts opened in recent months. Many of these investors book profits at small increases in prices, typically hold the shares for a few days or weeks, and churn their portfolios substantially. Many of them may be under the impression that the short-term capital gains (STCG) that they make will be taxed at a concessional rate of 15%. This may, however, not necessarily be the case.

It is only STCG in respect of transactions in equity shares on the stock exchange or equity-oriented mutual funds which attract the concessional tax rate of 15%. Gains on transactions in derivatives are taxed at the normal slab rates of the individual, in most cases, 30% plus applicable surcharge and cess.

Besides, in order to qualify for this concessional tax rate, the income needs to be taxable under the head “capital gains”. For that, the holding of shares has to be as investments, and not as stock-in-trade of a business. If the shares are regarded as stock-in-trade, the income from the sale of such shares would be business income, which will be taxable at normal slab rates. The mere classification by the taxpayer as capital gains does not necessarily mean that it will be taxed only as capital gains.

A few years ago, the issue of whether transactions in shares amounts to a business or an investment activity was the subject of substantial litigation, with the tax authorities seeking to tax the entire gains (whether the shares were held for more than one year or less) as business income. The controversy substantially died down after the Central Board of Direct Taxation (CBDT) clarified that if a taxpayer treated his gains from shares held for more than a year as long-term capital gains (LTCG), then it had to be taxed as LTCG. It was only if such shares were classified by the taxpayer himself as stock-in-trade that the gains on sale of such shares held for more than a year could be taxed as business income. Unfortunately, the clarification does not apply to shares held for a year or less, and the litigation continues in respect of the manner of taxation of gains in respect of such shares – whether as STCG at 15% or as business income at normal slab rates.

Fortunately, besides the CBDT circulars, which have laid down guidelines, the litigation during the past few years has seen quite a few rulings by the high courts and by the tribunal, laying down the guidelines for determination of whether the income is to be classified as capital gains or business income. Besides the taxpayer’s classification of the shares as stock-in-trade or investment, other factors to be considered include the period of holding of the shares. the frequency of transactions, the volume of transactions in relation to the total portfolio, whether the shares have been acquired out of borrowed funds, whether the same shares have been bought and sold with regularity, tax treatment of such gains in earlier years, the normal occupation of the taxpayer, the time devoted to such activity, the infrastructure utilized for such activity, and so on. These and several other factors are to be considered to gauge the real intention of the taxpayer—whether to earn a return on his funds over a longer period of time (hence, taxable as capital gains), or to make a quick profit by taking advantage of short-term share price movements (hence, taxable as business income).

In case of derivatives, except if the derivatives transactions are very few and occasional or the trading has been done with an intention to hedge the physical holding of shares, the profit would normally be taxed as business income at normal slab rates of tax, because the intention in most of the cases is to take advantage of the short-term price fluctuations.

Being classified as a business for tax purposes has its own consequences in terms of tax compliances. If the turnover is less than 2 crore and the profits are less than 6% of the turnover, books of account have to be maintained and a tax audit is required, unless the taxpayer is declaring business income at 6% of turnover under the presumptive tax scheme. In cases not falling under the presumptive tax scheme, books of account have to be maintained. Besides, a tax audit is required if the turnover exceeds 1 crore. If tax audit is required for any year, the provisions of tax deduction at source apply to the individual taxpayer from the subsequent year.

Each investor, therefore, needs to relook at his stock market transactions, and based on his facts, take a call as to whether it amounts to a business or not. He needs to pay his taxes accordingly, and file his tax returns, after undertaking the required compliance, based on his perception of his transactions in accordance with the applicable law.

Gautam Nayak is a chartered accountant

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Dow futures rise 200 points to kick off the week despite jump in coronavirus cases – CNBC

Dow Jones Industrial Average futures were higher in early morning trade on Monday, even as Covid-19 cases rise in the U.S. and abroad.

Futures contracts tied to the Dow advanced 200 points. S&P 500 futures and Nasdaq 100 futures also traded in positive territory.

“Stocks this week will trade on lockdown concerns and rising cases, but could see a boost into early December as the optimism around a near term, stopgap stimulus package grows,” said Shannon Saccocia, Chief Investment Officer at Boston Private. “Overall, the push and pull between tech stocks and cyclicals will likely continue through the next couple of weeks, and we could see some tough days as economic data is released that reflects the deterioration in consumer spending we are currently experiencing.”

All three major averages finished Friday’s session lower, while the Dow and S&P 500 also posted a loss for the week, falling 0.73% and 0.77%, respectively, for their first negative week in three. The Nasdaq Composite managed to eke out a 0.22% gain for the week, marking its second straight week of gains.

The move lower came as Covid-19 cases continue to rise, with the U.S. reporting a record-high spike of more than 195,500 new cases on Friday. Public health officials have warned that Thanksgiving celebrations on Thursday could further exacerbate the outbreak.

Friday’s jump brings the seven-day average of new cases to over 167,600, an increase of nearly 20% compared with a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University. The seven-day average of new cases are up by at least 5% week over week in 43 states and the District of Columbia, Hopkins data shows.

The spike has led to coronavirus-related restrictions in some places. On Thursday California Gov. Gavin Newsom instituted a “limited Stay at Home Order” on a majority of the state’s residents, requiring nonessential work and gatherings to cease between 10 p.m. and 5 a.m. The move followed New York City Mayor Bill de Blasio’s decision to close the nation’s largest school system amid a jump in cases

Such measures will “likely deliver negative growth” in the first quarter, JPMorgan economists said Friday. The firm downgraded its first-quarter GDP outlook to a 1% contraction, the first on Wall Street to forecast negative GDP for the first quarter of 2021.

A disagreement between the Treasury Department and the Federal Reserve over the continuation of funding for some of the emergency programs instituted amid the Covid-19 outbreak also weighed on markets last week.

Sentiment was kept in check, however, by positive developments over the treatment and prevention of Covid-19. On Saturday The Food and Drug Administration on Saturday granted an emergency use authorization for Regeneron’s Covid-19 antibody treatment, the experimental therapy given to President Donald Trump. Meanwhile, on Friday Pfizer and BioNTech applied for an emergency use authorization from the FDA for their coronavirus vaccine, which has a 95% efficacy rate.

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Dow rises more than 200 points to start the week amid more positive vaccine news – CNBC

Stocks rose on Monday after AstraZeneca and the University of Oxford said their coronavirus vaccine was up to 90% effective, becoming the third inoculation this month that was revealed to be effective in trial data.

The Dow Jones Industrial Average traded 191 points higher, or 0.7%. The S&P 500 gained 0.6% along with the Nasdaq Composite.

AstraZeneca said interim analysis showed its vaccine has an average efficacy of 70% with one dosing regimen showing effectiveness of 90%, while the other demonstrating 62% efficacy. This follows late-stage trial data from Pfizer-BioNTech and Moderna showing that their respective Covid-19 vaccines were around 95% effective.

Shares of cruise lines and airlines jumped in premarket trading on hope distributing these vaccines would reopen the economy and boost travel early next year. Shares of Carnival Corp. added 3% while United Airlines rose 1%.

The positive vaccine data this month has jolted stocks higher to record highs, despite concern about rising cases. Despite stalling out a bit last week, the Dow is up 10% in November. The S&P 500 is up 8%.

“With three vaccines now showing efficacy at 90%+ and health officials in the U.S. and EU rushing to approve them, the vaccination process is set to commence before the end of the year,” wrote Adam Crisafulli of Vital Knowledge. “This vaccine optimism is more than offsetting the very grim near-term transmission/mitigation landscape as cases spike and governments take further action to curb the virus spread. 

Down week

The Dow and S&P 500 were coming off a losing week as Covid-19 cases continue to rise, with the U.S. reporting a record-high spike of more than 195,500 new cases on Friday. Public health officials have warned that Thanksgiving celebrations on Thursday could further exacerbate the outbreak.

Friday’s jump in cases brings the seven-day average of new cases to over 167,600, an increase of nearly 20% compared with a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University. The seven-day average of new cases are up by at least 5% week over week in 43 states and the District of Columbia, Hopkins data shows.

The spike has led to coronavirus-related restrictions in some places. On Thursday California Gov. Gavin Newsom instituted a “limited Stay at Home Order” on a majority of the state’s residents, requiring nonessential work and gatherings to cease between 10 p.m. and 5 a.m. The move followed New York City Mayor Bill de Blasio’s decision to close the nation’s largest school system amid a jump in cases.

“Stocks this week will trade on lockdown concerns and rising cases, but could see a boost into early December as the optimism around a near term, stopgap stimulus package grows,” said Shannon Saccocia, chief investment officer at Boston Private.

“Overall, the push and pull between tech stocks and cyclicals will likely continue through the next couple of weeks, and we could see some tough days as economic data is released that reflects the deterioration in consumer spending we are currently experiencing,” Saccocia added.

Such measures will “likely deliver negative growth” in the first quarter, JPMorgan economists said Friday. The firm downgraded its first-quarter GDP outlook to a 1% contraction, the first on Wall Street to forecast negative GDP for the first quarter of 2021.

On Monday, Goldman Sachs cut its fourth-quarter GDP forecast along with its economic growth estimate for the first quarter of 2021. The bank now expects the U.S. economy to grow by 3.5% in the fourth quarter. That’s down from a previous forecast of 4.5% annualized growth. In the first quarter of next year, Goldman now sees economic growth of just 1%, down from a previous estimate of 3.5%.

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Day trading guide for Monday – Economic Times

Chandan Taparia, Motilal Oswal

Nifty Outlook

Nifty index opened positive and remained volatile in broader trading range for most part of the session on Friday. It fell in the initial half but recovered well in the second half of the session. Index witnessed a tussle between the bulls and bears but it managed to close positive with gains of 87 points.

It formed a small bodied Bullish Candle on daily scale but got stuck in between 12730 to 12950 zones from the last five trading sessions. However, major weekly structure is positive and continues moving northward with lower pace of buying interest. Now it has to continue to hold above 12750 zones to witness an up move towards 13000 zones while a hold below the same could see weakness towards 12700 then 12650 zones.

spot price

Derivatives

India VIX is holding below 20 zones from the last four trading sessions. Volatility has cooled down but needs to continue at lower zones to ride the momentum with higher market base. On option front, Maximum Put OI is at 12000 followed by 12500 strike while maximum Call OI is at 13000 followed by 13500 strike.

We have seen marginal Call writing in 13200 and 12800 strike while Put writing is seen at 12800 then 12500 strike. Option data suggests a wider trading range in between 12500 to 13000 zones.

Bank Nifty positive but saw selling pressure in the first half of the day. However a smart recovery was seen thereafter and the day ended green with gains of 333 points. It formed a Bullish candle on a daily and weekly scale. It has been consolidating in between 28500 to 29800 zones from the last four trading sessions and requires a follow up action to commence the next leg of the rally. Now it needs to hold above 29000 zones to witness an up move towards 29500 then 29800 level while on the downside support exists at 28750 then 28500 zones.

Nifty: Weekly:
Bull call spread: +12850 CE – 13000 CE (26th Nov, 2020)

Buy 1 lot of 12850 call @ 116

Sell 1 lot of 13000 call @ 50

Net premium paid: 66 points

Keep SL of net premium of 26 points: risk 40 points Keep target of net premium of 140 points: reward of 74 points

Rationale:

Nifty index has been witnessing buying interest at every small decline and heading towards new life time high territory.

India VIX has cooled down below 20 zones which indicates tight bulls grip in the market

Put Call Ratio has increased with Put writing at immediate strikes

Fx Technical

Kishore Narne, Commodities, MOFSL


USD/INR Status: Sideways-to-lower move looks possible in the short-term!

CMP: 74.18

Target: 73.50

Stop Loss: 74.75

Trade: Short-term trend looks bearish as long as the pair is trading below the resistance of 74.75 level.

Selling on rallies is advised targeting lower support at 73.50 level.

spot price2

Euro/USD Status: Short-term trend remains positive!

CMP: 1.1860

Target: 1.2020

Stop Loss: 1.1750

Trade: The pair is having short-term support near the 1.1750 mark and a rally towards higher resistance at 1.2020 looks likely. Buying on dips is advised.

spot3

Commodity Calls:

By Amit Sajeja, MOFSL

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