Trade setup for Aug 13: Nifty may open flat on mixed cues; FirstCry to list

All you need to know before market opens on Tues: Global stocks (India, US, Japan) set to react to inflation data; Experts recommended trading strategy for Nifty, Bank Nifty here; 15 stocks in F&O ban

Trading guide for Tuesday August 13, 2024: Indian equity benchmark indices this morning are set to react to a mixed set of data both from the global markets and macro-economic front. 

On the economic data; India’s inflation in July came-in lower than expected at 3.54 per cent as against consensus expectation of 3.65 per cent. However, on the other hand, the IIP (Index of Industrial Production) and Manufacturing production also dipped in June to 4.2 per cent and 2.6 per cent, respectively. 

At 07:00 AM, GIFT Nifty futures quoted around 24,360 levels – hinting at a likely indecisive start to the NSE Nifty 50 index today.

 

Global cues

Overnight the US market ended on a mixed note ahead of the crucial inflation data. Dow Jones ended 0.4 per cent lower; while NASDAQ gained 0.2 per cent the S&P 500 closed unmoved. 

The US 10-year bond yield remained steady around 3.92 per cent. Whereas, Gold futures zoomed past the $2,500-mark470 levels, and WTI Crude Oil futures jumped to near about $80 per barrel.

In Asia this morning, Japan’s Nikkei soared 2.6 per cent after inflation rose to 0.3 per cent. Straits Times was up 0.5 per cent, and Taiwan added 0.3 per cent. Kospi, however, was down 0.1 per cent.

How to trade in Nifty, Bank Nifty on Tuesday August 13, 2024; here’s what technical experts recommend to do:

Om Mehra, Technical Analyst, SAMCO Securities

The Nifty formed a spinning top candle on the daily chart on Monday, signaling indecision and a lack of clear direction in the short term. The 50 DMA hovers around the 24,000 mark and acts as crucial support, with 24,200 as the immediate support. On the upside, the 50 per cent Fibonacci retracement level at 24,500 serves as the immediate hurdle.

The Bank Nifty has gradually inched higher, as seen on the hourly chart, and is currently sustaining above the 38.2 per cent Fibonacci retracement level at around 50,550. The support is placed at the 50,000 level. However, the index remains below the 20 and 30 EMAs, despite the short-term upward movement. Bank Nifty would need to close above the 51,100 level; until then, the short-term outlook may remain slightly weaker.

Dhupesh Dhameja, Technical Analyst, SAMCO Securities

The Nifty is currently range-bound, with resistance at the 10 and 20 DEMA exerting downward pressure. A decisive breach of the 24,500 level is crucial to avoid selling pressure from higher levels and to fill the unfilled gap between 24,500 and 24,700.

The outlook has shifted from bearish to sideways. The rejection from its 20 DEMA, coupled with active call sellers at 24,500, indicates that a sustainable break above this level is needed to signal an upward breakout. Solid support at 24,200 offers a safety net on the downside. A decisive move beyond this range is essential for the index to gain momentum, or else intraday high volatility could be witnessed.

The outlook on Bank Nifty has shifted from negative to a more sideways trend. The index is finding strong support from the confluence of its 20 WEMA and an upward-sloping trend line, indicating that a momentum move could be on the horizon. On the upside, the index is struggling to sustain above the 50,800-50,900 levels, while strong support is emerging around 50,000 on the downside.

As long as the index trades within this range, momentum is likely to remain subdued, leading to potential intraday fluctuations. However, a sustained move above 50,800 could trigger strong short-covering in the Index.

Rajesh Bhosale, Equity Technical Analyst, Angel One

Technically, not much has changed as prices continue to gyrate within a range. The market's ability to absorb negative news and maintain lower levels is a positive sign; however, it appears fragile whenever prices move to a higher range.

It seems traders are waiting for some definitive action to trigger the next leg of momentum. On the downside, we are watching the advancing line on the hourly chart, currently around 24,200; a sustained break below this level could indicate the resumption of the recent market sell-off. Conversely, Nifty is in an uncertain zone between 24,500 and 24,700, which represents a bearish gap. For now, the 20-day EMA around 24,500 is a critical level, and a close above it could drive prices towards 24,700.

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

Technically, on a daily scale, the Nifty formed a green candle with shadows on both sides, signaling uncertainty. If the index sustains above 24,480, it could trigger a fresh rally toward the 24,600-24,700 levels. Therefore, a buy-on-dips strategy should be adopted on the Nifty. On the downside, support from the 34-day Exponential Moving Average (DEMA) is near 24,240, making the 24,200-24,240 range a key support zone for Nifty in the short term.

The Bank Nifty attempted to surpass the 50,710 level but failed to sustain above it, forming a green candle with large shadows. A sustained move above 50,710 could push the index further toward the 51,000-51,200 levels. Hence, a buy-on-dips strategy should also be adopted for Bank Nifty. On the downside, the 100-DEMA, positioned around 49,870, will act as a firm support level for the index in the short term.

Rupak De, Senior Technical Analyst, LKP Securities

The Nifty remained volatile on Monday. The sentiment is sideways to weak, with the index closing below the 21-day EMA. The RSI is in a bearish crossover, indicating weak momentum. The market might continue to be a sell-on-rise as long as it stays below 24,500. On the lower end, support is placed at 24,150.

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

On Monday, foreign institutional investors (FIIs) were net sellers of stocks to the tune of Rs 4,680.51 crore; thus far in August FIIs have net sold shares worth Rs 25,040.99 crore in the cash market. On the other hand, domestic institutional investors (DIIs) net bought shares worth Rs 4,477.73 crore on August 12, taking their monthly buy tally to Rs 27,977.74 crore.

In the derivatives segment, FIIs net sold 7,222 contracts of index futures for a consideration of Rs 422.97 crore yesterday. FIIs net sold 8,429 contracts of Nifty futures, 241 contracts of MidCap Nifty futures and bought 1,237 contracts of Bank Nifty futures.

Pursuant to which, FIIs long-short ratio in index futures stood at 1.1:1 – this ratio implies that foreign investors hold little more than 1 long position in index futures for every single bet on the short side of trade. The FIIs longs in index futures stood at 51.45 per cent.

Stocks in F&O ban period

A total of 15 stocks remain under the futures & options ban period on Tuesday, August 13 - Aditya Birla Capital, Aditya Birla Fashion Retail, Bandhan Bank, Biocon, Birlasoft, Granules India, Hindustan Copper, India Cements, IndiaMart Intermesh, LIC Housing Finance, Manappuram Finance, PNB, RBL Bank, SAIL and Sun Tv.

New listings today

Brainbee Solutions (FirstCry) and Unicommerce eSolutions to debut on the bourses on Tuesday. Shares of FristCry were seen trading at a near about 18 per cent premium, while Unicommerce at 63 per cnet in the grey market deals.

Primary market update

Saraswati Saree Depot Rs 160 crore IPO was subscribed 4.5 times at the end of Day 1 of the offer period. 

That apart – Positron Energy and Sunlite Recycling Industries IPOs were subscribed up to 17.9 times and 7.6 times at the end of Day 1 of the offer period on the NSE SME platform.

Meanwhile, Solve Plastic Products Rs 11.85 crore IPO opens for subscription on the NSE SME platform at Rs 91 per share; and Broach Lifecare Hospital Rs 4.02 crore IPO (Rs 25 per share) opens on the BSE SME platform today.