Stock Market news: Jackson Hole, DII flows in focus; GIFT Nifty at 24,700

All you need to know before the market opens on Monday: GIFT Nifty hints at 100 pts gap-up; Experts see Nifty rising to 24,700-25,000 levels. FIIs index long-short ratio at 1:1; 17 stocks in F&O ban.

Trading guide for Monday, August 19, 2024: Benchmark equity indices are likely to start the week on an upbeat note following the strong rally last Friday.

At 07:00 AM, GIFT Nifty futures quoted around 24,710 levels – hinting at a likely gap-up of over 100 points on the NSE Nifty 50 index today.

Apart from range breakout; steady domestic inflows into the stock market and lack of negative surprises on the corporate earnings front is aiding the positive mood on Dalal Street.

In the week ahead, the market will keenly watch the US Federal Reserve chair speech in Jackson Hole Symposium and FOMC minutes; an ease in economic slowdown may influence the chair to add more light on rates trajectory, said Vinod Nair, Head of Research at Geojit Financial Services in a note.

 

Global cues

The US stocks ended higher on Friday as investors played down a recession risk on stronger than expected retail sales data. Dow Jones, the S&P 500 and NASDAQ edged 0.2 per cent higher.

The US 10-year bond yield languished around 3.90 per cent. International Gold futures surged to 2,540 levels; while, WTI Crude Oil futures hovered around $75 per barrel.

In Asia this morning, Nikkei was down 0.3 per cent; Kospi and Taiwan quoted on a flat note.

Trading strategies in Nifty, Bank Nifty for Monday August 19, 2024 by market experts: 

Rajesh Bhosale, Equity Technical Analyst, Angel One

On Friday, Nifty closed above the recent congestion zone, and a range breakout is visible on the hourly charts. Additionally, Nifty has closed above the 20-Day EMA, which previously acted as resistance. With these technical indicators, it seems there’s more fuel for Nifty on the upside.

In the upcoming sessions, we may see levels of 24,700 and 24,850 being tested, which could serve as immediate hurdles. If global markets remain supportive, we might even retest the 25,000 levels and beyond.

Conversely, the bullish gap left today around 24,200 is critical; the observations above hold as long as it is defended. However, if breached, the market may head back toward the lower levels of 24,000 and 23,900. Traders are advised to monitor these levels and consider a buy-on-dip approach.

Om Mehra, Technical Analyst, SAMCO Securities

The Nifty overcame the 24,500 barrier and is currently maintaining above the 20 DMA. Nifty is also holding above the 50 per cent Fibonacci retracement level as well.  The daily RSI has rebounded from the lower levels and now stands at 55. Any pullback towards the 24,450 zone could be a buying opportunity for a short-term move towards the 24,700 level.

The Bank Nifty has formed a bullish candle, overcoming the hurdle at 50,400. However, Bank Nifty remains within the 38.2 per cent Fibonacci retracement level range at 49,700 and the 50 per cent level at 50,600. A double bottom pattern has formed on the daily time frame, suggesting that crossing 50,750 could lead to a move towards the 51,200 - 51,500 zone in the coming sessions.

Dhupesh Dhameja, Technical Analyst, SAMCO Securities

A tall bullish candlestick formed on the daily chart, as the Nifty closed above its previous week’s high, signalling renewed bullish momentum. Notably, the index also closed above the 10 and 20-Day Exponential Moving Averages (DEMA), with the RSI (14) moving above 50, indicating strengthening positive momentum.

The market outlook has turned bullish as the index closed above key short-term averages. This decisive move could prompt sellers to square off positions, potentially driving the index to fill the upside gap between 24,500 and 24,700. As long as the index remains above 24,350, a buy-on-dips strategy may be favourable.

The Bank Nifty has seen formation of a strong bullish candlestick formed on the daily chart, while the weekly chart revealed a tweezer bottom pattern, indicating potential for further gains. The index is currently hovering around the 100-day Exponential Moving Average (DEMA) and closed above the 10-day DEMA, though it remains below the 20-day EMA, indicating pressure from both directions. A buy-on-dips strategy could be effective as long as the index holds above the 49,700 level.

Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates

Technically, on a daily chart, the Nifty crossed the 21-Day Exponential Moving Average (DEMA) around 24,365 and formed a significant green candle, showing strength. As long as the index remains above 24,350, the bullish momentum is expected to continue. On the upside, gap resistance is placed near 24,690 and 24,960 levels.

The Bank Nifty has formed a green candle on the daily chart, indicating strength. However, the index may encounter resistance near 50,805, where the 21-DEMA is positioned. A sustained move above 50,810 could drive the index toward the 51,200-51,500 range.

Rupak De, Senior Technical Analyst, LKP Securities

In the near term, the Nifty may continue consolidating within the 24,300 – 24,550 range. Only a decisive move above 24,550 could trigger a directional up move in the index. A buy-on-dips strategy may be more effective unless Nifty decisively falls below 24,300.

Fund flow activity - Here’s an update on the latest FII, DII trading activity

On Friday, foreign institutional investors (FIIs) net bought stocks to the tune of Rs 766.52 crore; thus far in August, FIIs have net sold shares worth Rs 28,976.91 crore in the cash segment. On the other hand, domestic institutional investors (DIIs) net bought shares worth Rs 2,606.18 crore on August 16; taking their monthly buy tally to Rs 34,060.09 crore.

In the derivatives segment, FIIs net bought 34,806 contracts of index futures for a consideration of Rs 2,323.23 crore on August 16. FIIs were net buyers of 21,723 contracts of Nifty futures and 13,096 contracts of Bank Nifty futures.

Pursuant to which, FIIs long-short ratio in index futures jumped to 1:1 – this ratio implies that foreign investors now hold 1 long position in index futures for every single bet on the short side of trade. The FIIs longs in index futures stood at 50.38 per cent.

Stocks in F&O ban period

Biocon, Bandhan Bank, India Cement, PNB and SAIL among 17 stocks placed under the futures & options ban period for Monday, August 19. Aarti Industries, Aditya Birla Fashion Retail, Chambal Fertilisers, GNFC, Granules India, IndiaMart Intermesh, LIC Housing Finance, Manappuram Finance, NMDC, Piramal Enterprises, RBL Bank and Sun Tv were the other stocks.

Primary market update

Three new IPOs to open for subscription on Monday – Interarch Building Products Rs 600.29 crore share sale opens in the price range of Rs 850 – Rs 900 per share. 

Two new SME IPOs – Brace Port Logistics Rs 24.41 crore and Forcas Studio Rs 37.44 crore IPO will be available on the NSE SME platform.

Solve Plastic Products and Broach Lifecare Hospital SME IPOs to close today. The former was subscribed up to 34.2 times, and the latter up to 159.1 times as of Friday.