NIFTY OUTLOOK & FREE TRADING TIPS FOR 22 AUG 2024

Overview

Indian benchmark indices ended the trading session on a positive note amidst a volatile environment. The Sensex climbed 102 points, closing at 80,905, while the Nifty advanced 71 points to settle at 24,770. Despite the initial flat start, selective buying towards the final hour of trading helped push the indices to close near their day's highs.

Market Performance

• Nifty: The Nifty opened flat and traded within a narrow range for most of the session. However, a late surge in buying activity lifted the index by 71 points to close at 24,770.
• Sensex: The Sensex mirrored Nifty's movement, closing with a modest gain of 102 points.

Sectoral Indices

• Gainers:
  • FMCG: The FMCG sector outperformed, gaining over 1.3% as investors shifted towards defensive stocks.
  • Pharma: Pharma stocks also saw positive movement, rising 0.91%.
  • Metals: The metal sector posted decent gains of around 0.5%.
  • Telecom & Media: Both sectors registered gains between 0.5% and 1%.
• Losers:
  • Realty: The Realty index was the worst performer, dropping 1.31%.
  • Banking: The banking sector remained under pressure, dipping by 0.2%, limiting the upside for the broader market.

Top Performers

• Divis Labs: Leading the pack, Divis Labs saw significant buying interest.
• Titan Company: Also performed well, contributing to the day's gains.
• SBI Life Insurance, Cipla, Grasim Industries: Other notable gainers.

Lagging Stocks

• Tech Mahindra: Was among the top losers.
• UltraTech Cement, Tata Steel, Power Grid Corp, HDFC Bank: These stocks also saw profit-taking.

Midcap and Smallcap Performance

• Midcaps: The BSE midcap index rose by 0.4%, aligning with the broader market trend.
• Smallcaps: The smallcap index outperformed with a gain of nearly 1%.

Technical Analysis

• Nifty Levels:

  • Support: Immediate support for Nifty is observed at the 24,450-24,600 zone.
  • Resistance: Nifty faces resistance at 24,850 and could advance to the 25,000 level. The next resistance is anticipated at 24,960, with potential movement towards 25,100 in the short term.
  • Momentum: A negative divergence is developing on the momentum indicator, suggesting that while the trend remains positive, the upward movement might slow down with possible intraday pullbacks.

• Bank Nifty:

  • Support: The Bank Nifty found crucial support at the 50,350-50,300 zone.
  • Upside Target: As long as this support holds, the index could rally towards the 51,000-51,500 levels. A stop loss of 50,300 is recommended for long positions.

Global Cues

Global markets maintained a cautious stance ahead of the FOMC minutes release. The expectation of a potential rate cut in the US remains high, driven by declining inflation and moderated economic growth. This global sentiment is likely to influence Indian markets, making it essential for participants to monitor developments in the US closely.

Conclusion

The Indian market continues its gradual ascent, supported by sectoral rotation and strong domestic institutional investor (DII) flows. While defensive sectors like FMCG and pharma lead the rally, caution prevails due to profit-taking in banking stocks. The Nifty is poised to challenge higher resistance levels, with a short-term target of 25,000+ on the horizon. However, traders should be prepared for potential pullbacks and closely watch key support levels.

This report provides a comprehensive outlook on the market trends, sectoral performances, and technical insights, helping participants make informed decisions.