20/08/26, Market Analysis information by Mr Sunil Sankar Matkar

Rakesh Patil: Indian benchmark indices are likely see a strong opening on August 20, tracking GIFT Nifty, which was trading higher at around 24,222 in early trade.

Indian benchmark indices extended their losing streak on August 19 as investors remained concerned over elevated crude oil prices, higher global bond yields and persistent global uncertainty.

The indices opened lower and extended their losses, with the Nifty and Sensex slipping below 24,050 and 77,000, respectively, amid broad-based selling, particularly in defence and energy stocks. However, Information Technology stocks outperformed, limiting the overall decline.

Considering that the index is trading below all key moving averages and momentum indicators are weakening, the market structure remains weak. However, in case the benchmark Nifty 50 rebounds after a seven-day fall, the sustainability of those gains will be key to watch. The 24,200 level is expected to act as immediate resistance, as only a sustained move above it could open the door for further upside. However, a sustained move below 24,200 could keep the market in a consolidative phase, with immediate support at 24,000 followed by 23,900-23,800 as next support. Meanwhile, the Bank Nifty may rebound towards 57,500, its 20-day EMA. A sustained move above this level could pave the way for a move towards 57,900-58,000. On the downside, support is placed at 57,000-56,900, followed by 56,600, according to experts.

On August 19, the Nifty 50 declined 77 points, or 0.32 percent, to 24,078, while the Bank Nifty slipped 23 points, or 0.04 percent, to 57,240. Bearish dominance was maintained in the market, with about 2,006 shares under pressure compared with 1,071 shares that advanced on the NSE.

Nifty Outlook and Strategy

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities

The Nifty has extended its gradual decline over the past few trading sessions. The index has largely been forming small-bodied candles and has remained range-bound during most trading sessions, reflecting a lack of directional conviction. A noteworthy observation is that over the last 12 trading sessions, the index has consistently failed to surpass the previous session's high, highlighting persistent selling pressure at higher levels.

From a technical perspective, the index continues to trade comfortably below its key short-term and long-term moving averages. Both the 20-day and 50-day EMAs have started to trend lower, reinforcing the weakening market structure. Additionally, the daily RSI is on the verge of slipping below the 40 mark and remains in a declining trajectory, indicating a pickup in bearish momentum.

Going forward, the 23,950-23,900 zone is likely to act as a critical support area, as an upward-sloping trendline is positioned in this region. A decisive breach below 23,900 could accelerate the downside move towards the next important support zone of 23,650-23,600, which coincides with the previous swing low.

On the upside, the 24,180-24,220 range is expected to serve as a significant resistance zone, as it represents the confluence of the 50-day and 100-day EMAs. A sustained move above this hurdle would be required to improve the near-term technical outlook.

Key Resistance: 24,180, 24,220

Key Support: 23,950, 23,900

Strategy: Buy Nifty Futures between 24,030-24,130, with a stop-loss of 23,850, and target of 24,250.

Rupak De, Senior Technical Analyst at LKP Securities

The Nifty found support near the lower band of the rising channel. Besides, the index has filled a gap on the daily timeframe. The 61.80 percent Fibonacci retracement level also coincided with this support zone, where the index made a low. Immediate support is placed at 24,000–24,050, and as long as this zone holds, the Nifty may witness a meaningful recovery.

However, a sustained move below 24,000 could increase bearish pressure and drag the index towards much lower levels. Therefore, long positions should be held with a strict stop-loss at 24,000.

Key Resistance: 24,200, 24,350

Key Support; 24,000, 23,800

Strategy: Buy Nifty 24,200CE of August 25 expiry above Rs 80, with a stop-loss of Rs 54, and target of Rs 115.

Vaishali Patel, Senior Manager - Research- Technical Department at Jainam

Nifty 50 remains under short-term pressure after facing resistance near the 24,800 zone and slipping below its 10-day and 20-day moving averages. The recent correction has weakened momentum, with RSI falling below the neutral 50 mark. However, the broader structure continues to show resilience as the index is still maintaining a higher-low formation and trading above its rising trendline support.

Notably, the RSI is developing a Positive Reversal, where price has formed a higher low while RSI has registered a lower low, a pattern often associated with trend continuation rather than trend reversal.

The immediate support is placed at 23,900-23,800, which remains a crucial level for the bulls. A sustained hold above this zone could trigger a rebound towards 24,300-24,400. On the upside, 24,800 remains the key hurdle for a revival of bullish momentum. A breach of 23,600, however, could accelerate selling pressure towards 23,300 and lower levels. Overall, the bias remains short-term corrective but medium-term cautiously bullish as long as 23,800-23600 holds.

Key Resistance: 24,400, 24,500

Key Support: 23,800, 23,600

Strategy: Buy Nifty Futures above 24,200, with a stop-loss of 24,040, targeting 24,370.

Bank Nifty - Outlook and Positioning

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities

The Bank Nifty has continued to outperform the broader benchmark indices on a relative basis. However, the index has been consolidating within a narrow range over the past few trading sessions, indicating a lack of strong directional momentum. Owing to this prolonged consolidation, most of the key moving averages have flattened out, reflecting the absence of a clear trend.

Similarly, momentum indicators and oscillators are also portraying a neutral to sideways bias. Notably, the daily RSI has remained range-bound for nearly the last 30 trading sessions, highlighting the ongoing equilibrium between bulls and bears.

Going forward, the 56,700-56,600 zone, which coincides with the 200-day EMA, is expected to act as a crucial support area for the index. As long as this level holds, the broader structure is likely to remain stable. On the upside, the 57,700-57,800 range is likely to act as a significant resistance zone and may cap immediate advances.

A decisive breakout above 57,800 or a breakdown below 56,600 is likely to provide the next directional trigger, paving the way for a meaningful trending move in the index. Until then, the index is expected to remain in a consolidation phase within the prevailing range.

Key Resistance: 57,700, 57,800

Key Support: 56,700, 56,600

Strategy: Buy Bank Nifty Futures between 57,200-57,400, with a stop-loss of 56,700, and target of 58,000.

Rupak De, Senior Technical Analyst at LKP Securities

Bank Nifty continues to witness downward consolidation as the big boys in the space attract selling pressure. Although the actual fall was limited, overall sluggishness prevailed. Generally, this type of downward consolidation tends to end with an upward breakout in most cases. However, a further fall from the current level cannot be ruled out. Support remains at 57,000, and a decisive break below this level might trigger further weakness. On the higher end, resistance is placed at 57,650. A breakout above this level might induce a strong uptrend.

Key Resistance: 57,650

Key Support: 57,000

Strategy: Buy Bank Nifty 57,500 CE of August expiry above Rs 300, with a stop-loss of Rs 239, and target of Rs 430.

Vaishali Patel, Senior Manager - Research- Technical Department at Jainam

Bank Nifty continues to trade in a consolidation phase after failing to sustain above the 58,300-58,600 resistance zone. The index closed near 57,240, slipping below its short-term moving averages and indicating a lack of immediate bullish momentum. Price action shows a series of lower highs over the past few weeks, suggesting supply is emerging at higher levels.

However, the broader trend remains constructive as the index continues to hold above the rising trendline drawn from the April lows. The 57,000-56,700 zone is a crucial support area, coinciding with the trendline and previous breakout levels.

The RSI has drifted below the 50 mark, reflecting short-term weakness, but there is no sign of a major breakdown yet. A sustained move above 58,000 could revive buying interest and lead to a retest of 58,500-58,600. On the downside, a breach of 56,800 may trigger profit booking towards 56,000-55,500. Overall, Bank Nifty remains range-bound with a mildly positive medium-term bias as long as the 56,800 support zone remains intact.

Key Resistance: 57,800, 58,300

Key Support: 57,000, 56,700

Strategy: Buy Bank Nifty futures above 57,500, with a stop-loss of 56,900, and target of 58,200.

Source: Network18 

Disclaimer: The views and investment tips expressed by experts are their own and not those of us. We advises users to check with certified experts before taking any investment decisions