Trading guide for Thursday August 7, 2024: Benchmark equity indices are likely to start today’s trading session on a negative note tracking losses in global peers.
At 07:00 AM, GIFT Nifty futures quoted around 24,200 levels – hinting at a likely gap-down of around 150 points on the NSE Nifty 50 index.
On Wednesday, the Sensex and the Nifty had staged a smart rebounded with gains of 875 points and 305 points respectively.
Today, apart from the global markets, the RBI Policy meeting outcome and the weekly Nifty options expiry shall guide the trading sentiment in India. The RBI is widely expected to keep rates untouched.
Global cues
Overnight in the US, benchmark indices reversed strong early gains and finished in red. Dow Jones slipped 0.6 per cent, the S&P 500 declined 0.8 per cent and the NASDAQ shed 1.1 per cent.
The US 10-year bond yield inched higher to 3.93 per cent. Whereas, Gold futures languished around $2,425 levels, while WTI Crude Oil futures rose to $75 per barrel.
This morning in Asia, Japan’s Nikkei dipped 1.1 per cent. Taiwan plunged 1.8 per cent, and Kospi dropped 1 per cent. Straits Times was down 0.3 per cent.
Trading strategy in Nifty, Bank Nifty on Thursday August 8, 2024
Rajesh Bhosale, Equity Technical Analyst, Angel One
On the hourly chart, the Nifty is trading within a defined channel range of 23,900 – 24,400. This range aligns with key averages, with the lower end coinciding with the 50-EMA and the upper end with the 20-EMA and a bearish gap.
On RBI policy day, it will be crucial to observe price reactions around these levels. A sustained trade beyond the upper end could trigger further positive momentum, potentially filling the bearish gap around 24,700.
Conversely, failure to break higher could pull prices back to the lower band of 23,900, and a break below this level could fuel a fresh downside.
Om Mehra, Technical Analyst, SAMCO Securities
The Nifty might oscillate within a broad range, with 24,150 acting as support and 24,500 as resistance. The daily RSI remains skewed to the lower side and hangs below the average line of 50. For the Nifty to move higher, it needs to fill the existing gaps, which currently act as important resistance.
Over the past three sessions, the Bank Nifty has breached the crucial 50,000 level, thereby weakening this support. The hourly chart continues to show lower lows, indicating a mild bearish trend. The 38.2 per cent Fibonacci retracement level, positioned around 50,600, acts as a strong resistance.
Dhupesh Dhameja, Technical Analyst, SAMCO Securities
Currently, the Nifty is trading within a range established on August 5, with immediate resistance at 24,350. Relative Strength Index (RSI) on the Daily Charts had found support at the 40 level, which has consistently acted as a reliable support over the past nine months as well on the 1-Hour chart indicates a bullish base formation following a strong selloff, with a critical neckline at 24,350. The index is expected to find support around the 24,200 level.
The Bank Nifty is finding robust support at its 50 per cent retracement of the recent rally, with the 100-day exponential moving average also acting as a crucial support. On the 1-hour chart, the Relative Strength Index (RSI) has shown a bullish divergence, indicating a potential reversal in the index.
These indicators suggest that if the Bank Nifty sustains above 50,300, a short covering rally could push it to 50,700-50,900, with immediate support at 49,750.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
Technically, the Nifty has been taking support near 24,000 levels and maintaining the 50-DEMA support despite turbulence, resulting in a relief rally. 50-DEMA is currently near 23,980, and as long as the index holding above it relief rally likely to continue. On the higher side, immediate resistance for the index is placed near 24,430, where 21-DEMA hurdle is located followed by 24,700.
The Bank Nifty index, on a daily basis, has formed a homing pegion candlestick pattern, a bullish reversal pattern. According to this pattern, if Bank Nifty sustains above Tuesday’s high of 50,690, it may experience fresh bullish momentum. On the downside, 49,650 will act as key support for the index in the short run.
Rupak De, Senior Technical Analyst, LKP Securities
The Nifty remained sideways on Wednesday as traders waited for the RBI monetary policy meeting scheduled for Thursday. An indecisive candlestick pattern is visible on the daily chart. On the higher end, resistance is observed at the 24,400-24,500 levels. Selling pressure around that level might induce a correction in the market. On the other end, the trend might change to bullish if Nifty gives a decisive breakout above 24,500.
Where is the big money moving? Here’s an update on the latest FII, DII trading activity
On Wednesday, foreign institutional investors (FIIs) net sold stocks to the tune of Rs 3,314.76 crore. On the other hand, domestic institutional investors (DIIs) net bought shares worth Rs 3,801.21 crore.
In the derivatives segment, FIIs net sold 14,738 contracts of index futures for a consideration of Rs 1,032.45 crore on August 7. FIIs net sold 5,698 contracts of Nifty futures; 9,516 contracts of Bank Nifty futures and were net buyers of 381 contracts of MidCap Nifty futures.
Pursuant to which, FIIs long-short ratio in index futures stood fell to 1.3:1. This ratio implies that foreign investors hold more than 1 long position in index futures for every single bet on the short side of trade. The FIIs longs in index futures stood at 55.96 per cent.
Stocks in F&O ban period
Aditya Birla Capital, Aditya Birla Fashion Retail, Birlasoft, GNFC, Hindustan Copper, India Cements, IndiaMart, LIC Housing Finance, Manappuram Finance and RBL Bank are the 10 stocks in the futures & options (F&O) ban period on Thursday.
New listings
Mainline IPO Ceigall India and NSE SME IPO Dhariwalcorp to list on the respective bourses today. The former quoted on a rather flat note in the grey market deals, while the latter commanded over 30 per cent premium.
Primary market update
Aesthetik Engineers IPO to open for subscription on the NSE SME platform in the price band of Rs 55 – Rs 58 per share.
Brainbees Solutions, the parent company of FirstCry, IPO was subscribed up to 30 per cent at the end of Day 2 of the offer period. Meanwhile, Unicommerce eSolutions IPO was subscribed 12.4 times.
