NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 8 AUG 2024

Overview

On August 7, 2024, Indian benchmark indices ended on a strong note, with the Nifty closing at 24,297, up 305 points or 1.27%, and the Sensex finishing at 79,468, up 874 points or 1.11%. This rally came ahead of the anticipated RBI policy outcome, with all sectoral indices closing in the green. The broader market outperformed, with both the BSE Midcap and Smallcap indices rising more than 2%.

Market Performance

• Nifty 50: Up 305 points or 1.27% at 24,297.
• Sensex: Up 874 points or 1.11% at 79,468.
• Market Breadth:
  • Advancers: 2,696
  • Decliners: 698
  • Unchanged: 72

Sectoral Performance

All sectors ended in the green, with significant contributions from:

• Metals: Top performer
• Pharma
• Oil & Gas
• Healthcare
• Media
• Power
• Telecom
• Capital Goods

Key Gainers and Losers

• Top Gainers:

  • Coal India
  • Adani Ports
  • Power Grid Corp
  • Cipla
  • Wipro

• Top Losers:

  • IndusInd Bank
  • Eicher Motors
  • Britannia
  • Tech Mahindra
  • Titan Company

Broader Market Performance

• BSE Midcap Index: Up over 2%
• BSE Smallcap Index: Up over 2%

Technical Analysis

Nifty witnessed a good recovery after three days of decline, trading positively throughout the session and closing above the 40-day average of 24,138. Key observations include:

• Candlestick Pattern: The formation of a long-legged DOJI pattern, indicating indecisiveness.
• Support Levels: Immediate support at 23,960.
• Resistance Levels: Immediate hurdles at 24,520 – 24,550; a decisive close above 24,500 needed for sustained rebound.
• Volatility: India VIX has cooled off, indicating a decrease in market volatility.

Bank Nifty

• Performance: Witnessed a late surge, closing well above intraday lows.
• Support Levels: Crucial support zone at 49,800 – 49,700.
• Resistance Levels: Potential for pullback to 50,600 – 50,800.

Global Influences

Global factors and headwinds persist, which could continue impacting Indian markets in the coming days. Key global influences include:

• Bank of Japan: Deputy Governor's reassurance of not raising interest rates during financial instability led to a rebound in global markets.
• Middle East Tensions: Risk-off sentiment due to rising tensions could lead to intra-day volatility.

Market Outlook

While the market experienced a relief rally today, ongoing global uncertainties suggest potential for further volatility. The RBI policy outcome, expected on Thursday, will be crucial, with the committee likely to maintain the current interest rate. Interest-sensitive sectors and stocks will be in focus.

Conclusion

The Indian stock market showed strong resilience and recovery on August 7, driven by positive global cues and broad-based buying across sectors. Despite the rally, market participants should maintain a cautious outlook due to potential volatility and global uncertainties. The Nifty's ability to sustain above the key resistance levels will be critical for a continued upward trajectory.