Nifty and Bank Nifty Performance: Expert Insights and Investment Strategy
Today’s market exhibited signs of weakness as Nifty faced a dip below the crucial 19400 level. On August 17, major indices concluded with a decline. Nifty’s retreat was attributed to selling across sectors, except for public sector banks. The trading session concluded with the Sensex declining by 388.40 points (0.59%), settling at 65151.02. Similarly, Nifty closed at 19365.30, marking a decrease of 99.70 points (0.51%).
The trading day saw about 1777 shares experiencing gains, while 1696 shares faced declines. A total of 152 shares remained unchanged. In light of this, crafting an effective investment strategy for Nifty-Bank Nifty warrants attention. Virendra Kumar, a seasoned expert, offers his perspective on the matter.
Nifty Investment Strategy: Resistance and Support Analysis
For Nifty, the initial resistance stands at 19466-19519 (20DEMA), with a more substantial resistance projected at 19557-19594/623. On the lower side, the first support level exists within 19306-19259, followed by a broader base at 19222-19190. The strategy of capitalizing on selling near the first resistance proved effective, leading to the attainment of the 19309 target. The market observed substantial selling by Foreign Institutional Investors (FIIs) and significant shorting in indices and stocks.
As the new week unfolds, call writers have established their positions in the 19400-19500 range. Notably, the 20-day Exponential Moving Average (20 DEMA) sits at 19519, posing a potential obstacle. Put writing activity is concentrated around 19300. The zone spanning 19306-19259 holds critical importance for Nifty. A prudent approach involves considering the closure of short trades at 19259, which could signify an upturn in Nifty’s strength. However, a breach of 19259 might usher in the 19190 level. The prospect of a rebound hinges on the performance between 19259 and 190.
Moreover, a robust resistance zone is discernible at 19390-19410 following the gap down, presenting opportunities for short trades at higher levels.
Bank Nifty Investment Strategy: Resistance and Support Analysis
Bank Nifty confronts its initial resistance at 44047-44210, with a significant resistance ceiling at 44432-44560. On the downside, the primary support range is identified as 43690-43510, followed by a more extensive base spanning 43414-43290. Recent market activity witnessed Bank Nifty trading within a range, prompting short trades at higher levels.
The 44000-44300 range continues to be influenced by call writers, with notable put writing at 44000, 43800, and 43500 levels. The 100-day Exponential Moving Average (100DEMA) is positioned at 43810, adding to its significance. The post-gapdown trajectory presents a challenge in predicting potential rises or falls.
The support area of 43690-510 holds potential for a pullback, while the next significant downturn might extend below 43510-490, with the range of 43290-160 also being a possibility.
