Global Notices

U.S. stocks closed higher on Friday as investors downplayed recession risks due to better-than-expected retail sales. The Dow Jones, S&P 500 and NASDAQ rose 0.2 percent.

The yield on 10-year US bonds was around 3.90 percent. International gold futures rose to 2,540 points, while WTI crude oil futures were around $75 per barrel.

In Asia, the Nikkei lost 0.3 percent this morning; the Kospi and the Taiwan index were unchanged.

Trading Strategies in Nifty, Bank Nifty for Monday, August 19, 2024 by Market Experts:

Rajesh Bhosale, Technical Equity Analyst, Angel One

On Friday, Nifty closed above the recent congestion zone and a range breakout is visible on the hourly charts. Moreover, Nifty closed above the 20-day EMA which was previously acting as a resistance. With these technical indicators, there seems to be more fuel for Nifty on the upside.

The coming sessions may see a test of 24,700 and 24,850 levels, which could act as immediate hurdles. If global markets continue to remain supportive, we could even retest 25,000 levels and beyond.

Conversely, the bullish gap remaining today around 24,200 is critical; the above observations hold as long as it is defended. However, if it is breached, the market could fall back to the lower levels of 24,000 and 23,900. Traders are advised to monitor these levels and consider a buy-on-dip approach.

Om Mehra, Technical Analyst, SAMCO Securities

The Nifty has cleared the 24,500 level and is currently holding above the 20-day moving average. Nifty is also holding above the 50 percent Fibonacci retracement level. The daily RSI has recovered from the lower levels and is now at 55. Any pullback towards the 24,450 zone could be a buying opportunity for a short-term move towards the 24,700 level.

The Bank Nifty has formed a bullish candlestick and cleared the hurdle at 50,400. However, the Bank Nifty remains within the 38.2 percent Fibonacci retracement level range at 49,700 and the 50 percent level at 50,600. A double bottom pattern has formed on the daily time frame, suggesting that crossing 50,750 could result in a move towards the 51,200 – 51,500 zone in the coming sessions.

Dhupesh Dhameja, Technical Analyst, SAMCO Securities

On the daily chart, a high bullish candle formed as the Nifty closed above its previous week’s high, indicating renewed bullish momentum. Notably, the index also closed above the 10-day and 20-day exponential moving averages (DEMA) with the RSI (14) rising above 50, indicating increasing positive momentum.

The market outlook has turned positive as the index closed above the key short-term averages. This crucial move could prompt sellers to close their positions, which could potentially push the index to close the upside gap between 24,500 and 24,700. As long as the index remains above 24,350, a buy-on-dips strategy could be beneficial.

The Bank Nifty has formed a strong bullish candle on the daily chart while the weekly chart showed a tweezer bottom pattern, suggesting potential for further gains. The index is currently oscillating around the 100-day Exponential Moving Average (DEMA) and closed above the 10-day DEMA but remains below the 20-day EMA, indicating pressure from both directions. A buy-on-dips strategy could be effective as long as the index remains above the 49,700 mark.

Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates

Technically, on a daily chart, the Nifty has crossed above the 21-day exponential moving average (DEMA) at around 24,365 and formed a significant green candlestick indicating strength. As long as the index stays above 24,350, the bullish momentum is expected to continue. On the upside, gap resistance lies at 24,690 and 24,960.

The Bank Nifty has formed a green candle on the daily chart, indicating strength. However, the index may face resistance at 50,805, where the 21-DEMA is positioned. A sustained move above 50,810 could push the index towards the 51,200-51,500 zone.

Rupak De, Senior Technical Analyst, LKP Securities

In the short term, the Nifty could continue to consolidate in the 24,300-24,550 range. Only a sharp move above 24,550 could trigger an upside move in the index. A buy-on-dips strategy could be more effective unless the Nifty falls significantly below 24,300.

Fund Flow Activity – Here is an update on the latest FII and DII trading activity

On Friday, foreign institutional investors (FIIs) bought shares worth Rs 766.52 crore on a net basis; so far in August, FIIs have sold shares worth Rs 28,976.91 crore net in the cash segment. On the other hand, domestic institutional investors (DIIs) bought shares worth Rs 2,606.18 crore on a net basis on August 16, taking their monthly purchase volume to Rs 34,060.09 crore.

In the derivatives segment, FIIs purchased 34,806 index futures contracts worth Rs 2,323.23 crore on a net basis on August 16. FIIs were net buyers of 21,723 Nifty futures contracts and 13,096 bank Nifty futures contracts.

As a result, the FIIs’ long-short ratio in index futures rose to 1:1 – this ratio means that foreign investors now hold a long position in index futures for every single bet on the short side of the trade. FIIs’ long positions in index futures stood at 50.38 percent.

Stocks during the Food and Beverage Lock-up Period

Biocon, Bandhan Bank, India Cement, PNB and SAIL were among the 17 stocks that were subject to a futures and options ban on Monday, August 19. The other stocks were Aarti Industries, Aditya Birla Fashion Retail, Chambal Fertilisers, GNFC, Granules India, IndiaMart Intermesh, LIC Housing Finance, Manappuram Finance, NMDC, Piramal Enterprises, RBL Bank and Sun Tv.

Primary market update

Three new IPOs will open for subscription on Monday – Interarch Building Products’ share sale worth Rs 600.29 crore will begin at a price band of Rs 850-900 per share.

Two new SME IPOs – Brace Port Logistics Rs 24.41 crore and Forcas Studio Rs 37.44 crore – will be available on the NSE SME platform.

The IPOs of Solve Plastic Products and Broach Lifecare Hospital SME will close today, with the former subscribed up to 34.2 times and the latter up to 159.1 times by Friday.