Trade Setup and Analysis: The trading landscape for August 21 witnessed a promising start to the week with an initial bounce in market activity. While the Nifty exhibited early morning weakness, it rebounded resiliently, finding support around the 19300-19250 levels. Notably, these levels align with the Nifty’s 50-day Exponential Moving Average (EMA), accentuating their significance as a crucial support zone. Conversely, the 20-day EMA, positioned around 19500, emerges as a potential resistance point for the Nifty. The previous trading day saw the Nifty 50 index closing at 19394, marking an 83-point surge and forming a bullish candlestick pattern on the daily scale. Similarly, the BSE Sensex rose by 267 points to conclude at 65216.
Market Movement and Support-Resistance Levels
The broader market also enjoyed a notable uptrend, reflecting a positive sentiment. The Nifty Midcap 100 and Smallcap 100 indices exhibited gains of 0.8% and 0.6%, respectively. Furthermore, the India VIX (volatility index) dipping below the 12 level is an encouraging sign for the bullish sentiment.
From a technical perspective, Monday’s candlestick pattern implies a range-bound movement with support projected near the 19250-19300 range, as noted by Nagraj Shetty, Technical Research Analyst at HDFC Securities. While Nifty currently rests on immediate support, an absence of robust upward momentum might lead to repeated testing of the support levels, potentially leading to a breach and subsequent decline. Alternatively, if new momentum emerges, Nifty might steer towards the 19500 mark.
Uptrend in Nifty Midcap 100 and Smallcap 100 Indices, India VIX Impact
To navigate the market effectively, understanding key support and resistance levels is pivotal. For Nifty, pivotal support lies at 19322, followed by major support levels at 19292 and 19242. On the upside, resistance levels are anticipated at 19421, 19452, and 19502. A similar dynamic applies to Nifty Bank, with support points at 43896, 43837, and 43741, and resistance levels at 44089, 44148, and 44244.
Examining call and put option data, the 19400 strike holds maximum Call open interest, potentially serving as a resistance level. On the put side, the 19300 strike witnesses substantial Put open interest, signifying a significant support level.
Technical Analysis and Momentum Projections
In terms of specific stocks, some noteworthy trends emerge. Shares with high delivery percentages include Maruti Suzuki India, Torrent Pharmaceuticals, Marico, Oberoi Realty, and Godrej Consumer Products, indicating investor interest. Moreover, long build-up is observed in 71 stocks, whereas 21 stocks display long unwinding and 13 stocks indicate short build-up. On the flip side, 81 stocks are witnessing short covering, all signaling diverse trading patterns.
Foreign Institutional Investors (FIIs) sold Rs 1901.10 crore in Indian markets on August 21, while Domestic Institutional Investors (DIIs) made a net purchase of Rs 626.25 crore. Notably, certain stocks find themselves under F&O ban on NSE, including Metropolis Healthcare, Chambal Fertilizers & Chemicals, and Zee Entertainment Enterprises, highlighting market regulation measures.”
