NIFTY OUTLOOK FOR 26 AUG 2024

Overview:

The Indian benchmark indices ended flat in a volatile trading session on August 23. The market sentiment was cautious as investors awaited the speech of FED Chair Jerome Powell for signals on the future interest rate path.

• Sensex: Up 33.02 points or 0.04% to close at 81,086.21.
• Nifty: Up 11.70 points or 0.05% to close at 24,823.20.

Market Sentiment:

• The market showed mixed performance due to global uncertainties, leading to oscillations around a flat trajectory.
• The auto sector outperformed as it gears up for festive season demand with multiple launches.
• Most sectoral indices were in the red, indicating caution among investors.

Technical Analysis:

• Nifty opened flat and consolidated during the day, closing with minor gains of ~12 points.
• Nifty has closed positive for the seventh consecutive trading session, signaling a stretched upmove without a significant pullback.
• The hourly momentum indicator showed a negative crossover along with negative divergence, suggesting a possible intraday dip. Caution is advised for long positions.
• Nifty is nearing the 78.6% retracement mark at 24,830, which could restrict further upside. The overall trend remains sideways with a consolidation range between 24,200 and 25,000.

Bank Nifty:

• The Bank Nifty also experienced range-bound price action, closing marginally in the red.
• The index may resume its upmove after a few days of consolidation, with an expected upside towards 51,500 – 51,900 from a short-term perspective.
• Traders should maintain a stop loss at 50,400 for long positions.

Sector Performance:

• Top Gainers: Bajaj Auto, Coal India, Tata Motors, Sun Pharma, and Bharti Airtel.
• Top Losers: Wipro, ONGC, Divis Labs, LTIMindtree, and Infosys.
• BSE Midcap Index: Down 0.6%.
• Smallcap Index: Ended flat.
• Sectoral Performance:
  • Auto: Up 1%.
  • Metal, Realty, Media, PSU Bank, IT: Down 0.5% to 2.5%.

Outlook:

• On Monday, markets are likely to react to global cues post the US Fed speech.
• Traders are advised to maintain a positive outlook unless Nifty decisively breaks below 24,500.
• The banking sector remains key to the next directional move, while other sectors are currently balancing each other.
• Traders should avoid aggressive positions and focus on stock-specific strategies.