NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 18 AUG 2022

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Nifty has made a strong recovery over the past few weeks. This move has pushed the markets out of the consolidation/correction phase they have been in for several months. Any short-term correction should be used to buy for the medium-term uptrend. Bulls on Dalal Street kept momentum as Sensex zoomed past the psychological 60K level and Nifty moved towards 18K on the backdrop of easing inflation and heavy FII month-to-date buying. While global factors remain a blur, India is seen as a bright spot in today's challenging times. Nifty continues its journey north on continued buying by FIIs and cooling Crude Oil prices, however there is a risk of some profit booking after a 7 day winning streak as Nifty approaches the psychological 18000 level. India has been an outperformer versus EM and DM peers over the past 45 days, gaining on cooling inflation expectations as a commodity importer and reducing equity risk premia as a growth market. FII inflows over the past 45 days totaled $1.5 billion, more than double inflows from domestic institutions. Falling commodity and oil prices also boosted foreign investor confidence. Western markets were weak ahead of US FOMC meeting minutes release. Domestic retail investors have not participated in the recent rally, as evidenced by their net long position in single-stock futures, which has shrunk to $8.5 billion prospectively when Nifty was at 18,000 in early April, the net long position in retail stock futures at $12 billion. The upswing in global markets, particularly in the US, combined with favorable domestic factors, i. H. improving macros, steady foreign flows, etc. are helping the markets to keep the prevailing trend. We therefore reiterate our bullish view and suggest using any interim decline or break to create new longs. The scheduled weekly schedule may result in some lashings, so plan accordingly. PSU banks and IT stocks helped Nifty surpass the 17900 level today however some gain bookings were seen in car names. HDFC twins recouped any early losses that led to a rebound in Bank Nifty from lower levels. Benchmark indices closed higher on August 17 with Nifty closing above 17,900 led by PSU banking, energy and information technology stocks. On completion, the Sensex rose 417 points to 60260 and the Nifty rose 119 points to 17,944. This suggests there may be further room for participation as well as dry powder to cushion declines caused by global macro factors. Banks, industrials and autos led and continue to attract additional flows. While metals stocks saw some shorting, weaker global growth momentum would act as a headwind for any significant upward revision of earnings estimates. IT appears to be the most vulnerable in this environment as it impacts US and EU growth. A longer period of consolidation is possible before the index attempts to move towards the 18500 level. IT stocks remain strong while metals continue to consolidate. Value is seen in select midcap stocks. Consistent participation by FIIs is the backbone of the current domestic market rally. This reversal in FII trend is credited to the resilience of the Indian economy even as inflation continues to plague western markets. Technically, the market is consistently making higher highs and higher lows, suggesting the continuation of an uptrend in the near future.  Nifty has remained above the declining trend line, confirming the continuation of the ongoing bull run. The uptrend remains intact as the barometer index has not shown any weakness. The popular momentum oscillator is in a severely overbought zone but has no bearish crossover, suggesting the continuation of the bullish momentum. On the upper end for intraday 18 aug 2022, resistance is seen at 18100-18200. Support at 17800 is visible on the lower end for intraday 18 aug 2022. The Nifty has also formed a bullish candle on the daily charts, which also supports the uptrend. However, a quick intraday correction is not out of the question if the index trades below 17800 , and below that it could reach the 17700 -17600 levels. On the upside, above 17950 the first upside target for the index would be 18,000 and further rise could see it move up to 18150. Bank Nifty is consolidating near the 39600 level where we can expect some profit booking towards the 39200-38500 zone, while if it holds above the 39600 level we can expect a move towards the 40k level.

Resistance: 18050, 18150, 18250

Support: 17950, 17850, 17750