Indian stock markets ended steady and extended profit-taking for the fifth consecutive week ending August 25 amid volatility on mixed global signals, gains in US bonds, lackluster monsoon, concerns in RBI meeting minutes about rising inflation and a cautious view on the Federal Reserve’s approach. Chairman Jerome Powell. Jackson Hole speech.
This week, BSE Sensex fell 0.09% or 62.15 points to close at 64,886.51 and Nifty50 fell 0.22% or 44.35 points to close at 19,265.80.
However, the broader indexes, BSE Mid-cap and BSE Small-cap, outperformed and hit new highs this week and rose 1.5% and 2% respectively. The BSE Large-Cap Index ended flat.
“On the weekly chart, the Nifty50 has formed an inverted hammer that indicates a potential trend reversal and on Friday the index closed above the strong support at 19,250. A similar candlestick pattern is also spotted in BankNifty’s weekly chart. Immediate support for Nifty is at 19,200 while the upside is capped at 19,470 and in the case of BankNifty, support is at 43,600 while resistance is at 44,960. BankNifty will be accompanied by a hidden bullish RSI divergence, which is an extremely bullish sign,” said Progressive Equity Manager Aditya Gaggar.
“Except for the pharmaceutical industry, all other industries are stuck in a range and just a breakout to one side or the other will provide the right direction. The ongoing correction in the pharmaceutical industry will continue. at 1 to 2% before the outbreak.” resume the uptrend.
“D outperform the broader markets in the future,” he added. Among sectors, the BSE Pharma and Nifty PSU Bank indexes both fell 1.5%, the Nifty Energy index fell 1.2%, while the Nifty Information Technology index gained 1.0% and the Nifty Media index rose. 0.6%.
The BSE small-cap index rose 2% with the addition of Prakash Industries, Kopran, Titagah Rail Systems, Jupiter Wagons, International Conveyors, Garware Hi-Tech Films, Gujarat Mineral Development Corporation, Gabriel India, Atul Auto, Centum Electronics and Jain Irrigation System. 20 percent. By contrast, Sadhana Nitrochem, DCM Shriram Industries, Shoppers Stop, Kirloskar Oil Engines, MSP Steel & Power, Tanla Platforms, Windlas Biotech, Tega Industries and Cerebra Integrated Technologies fell 9 to 16%.
“There was great pessimism about slowing global growth due to higher inflation and higher interest rate scenarios, and investors, not seizing any opportunities, resorted to taking profits. before the results of Federal Reserve Chairman Jereme Powell’s speech at Jackson Hole. Amol Athawale, vice president of technical research at Kotak Securities, said there are concerns that in his speech the Fed Chair will highlight concerns about rising inflation and why interest rates need to be raised. one more time to reduce inflation.”
“Technically, Nifty recorded profits close to the 20-day SMA (Simple Moving Average). After a long time, the index closed below the 50-day SMA, mostly negative. For traders In position trading, 19,350 could be the trend-decisive level, above which the market could rally to 19,450 and 19,575 levels. On the other hand, selling pressure is likely to accelerate if the index trades below 19,230 and below that the market could slide to 19,150-19.100.”
“For Bank Nifty, at the bottom, 44,000 will be an important support area, while 44,750 or the 50 and 20-day SMA and 45,000 could act as an immediate hurdle for the bulls. . Below 44,000, it could retest between 43,750 and 43,500.” he added.
Selling activity by foreign institutional investors (FII) continued for the fifth consecutive week as they sold off shares worth Rs 4,895.29 crores, while domestic institutional investors ( DII) bought shares worth Rs 8,495.99 crores this week. However, so far this month, FII has sold shares worth Rs 15,821.13 crore and DII has purchased shares worth Rs 17,741.85 crore.
Where will Nifty50 go? The Nifty Index dropped to a significant moving average support (55EMA). Sentiment will remain bearish as long as the index remains below the 19,450 level, where the 21-day exponential moving average (EMA) is positioned on the daily timeframe. If the index plummets below 19,240, it is likely to push Nifty towards the 19,000 mark.
Nifty has reached the 38.2% Fibonacci retracement level at 19,245 during the rise from 16,828 to 19,922, making this an important level to watch. On the weekly chart, Nifty closed negative for the fifth consecutive week, which also shows a lack of buying interest. The weekly, daily and hourly momentum indicators show a negative crossover, which is a sell signal. Therefore, price and momentum indicators suggest the next downtrend.
Overall, we will maintain our negative view on the index for the 19,100 target. Critical support lies between 19.200 and 19.180, while the immediate obstacle lies between 19.360 and 19,400.
The Bank Nifty pullback has been broken down at the 44,900 – 45,000 area, where resistance is located in the form of the 50% Fibonacci retracement level. The daily and hourly momentum indicators are providing divergence signals and therefore are likely to consolidate. The likely consolidation range will be between 44,800 and 43,900.
