Discussing the market’s future prospects, Rahul Sharma, Director and Technical & Derivatives Head at JM Financial, suggests that the market appeared rangebound in August. FIIs reduced their market positions early in the month and created short positions throughout. However, as FIIs covered their short positions and retail positions decreased, the market may turn bullish in September. A Nifty breakthrough above 19500 could lead to levels between 19800 and 20,000.
Market Outlook for August Recap
Sharma predicts a potential Nifty breakout in September, with a favorable risk-reward scenario. He recommends buying call options to capitalize on market bullishness. Additionally, if Nifty surpasses 19500, positional buying becomes an option. In contrast, Bank Nifty may face pressure, while promising growth is expected in the Chemical and Midcap IT sectors.
FIIs’ August Moves and Market Sentiment
Tata Steel and Hindalco are favored choices in the metal sector. Despite sector volatility, the medium-term chart structure remains strong, suggesting continued bullishness. Tata Steel may reach Rs 140 from its current level.
In the public sector, Sharma expects strong performance in September, particularly favoring GAIL India. In the sugar sector, Balrampur Chini, Renuka Sugars, and Triveni Engineers are top picks.
Selected stocks in FMCG and the chemical sector are worth considering. Tata Chemicals and Deepak Nitrite are the preferred choices in the chemical space, offering attractive risk-reward profiles.
