NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 19 AUG 2022

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It's been mostly a one-way street for equity markets since July 2022. Domestic stock market benchmarks BSE Sensex and NSE Nifty 50 ended slightly higher on Thursday, a day of F&O's weekly schedule. Sensex ended 38 points, at 60298, while Nifty was up 12 points, to settle at 17956. The rebound was led by Kotak Bank 4% up, L&T, Bharti Airtel, SBI, HDFC Bank, HDFC and ITC. However, stocks that kept the indexes under pressure during the day included Infosys, TCS, Axis Bank, ICICI Bank and Wipro. Following the release of Fed minutes, domestic stocks posted gains amid weak sentiment from global peers. The minutes showed that while concerned about the impact of aggressive action, policymakers favored another rate hike. On the domestic market, IT and pharmaceuticals were the biggest laggards, reacting to the decline in US equities, while financials retained support.

On the technical front, Nifty formed a positive candle on the daily chart and is poised to challenge the lifetime high. Trendline resistance near 21st Oct, 22nd Jan and 22nd Apr highs has been broken and is trading comfortably above it. With this in mind, expect the current rally to extend further towards the 18200-18500 levels immediately. Likewise, the support base has now moved up, into the 17800-17500 area (gap support). The Momentum oscillator, while trading in overbought price conditions, is not showing any signs of exhaustion yet, instead being more supportive as the weekly RSI broke the 6-month falling trend line. Market breadth has improved remarkably, indicating broader market participation across sectors.

Resistance: 18000, 18050, 18150

Support: 17900, 17800, 17700