IGI Logo

Market Closing Commentary

Indian benchmark indices extended their losing streak to the fifth consecutive session, with the Nifty 50 closing below the 24,300 mark on 17 August. Persistent concerns over elevated crude oil prices, geopolitical uncertainty and rupee weakness continued to weigh on overall market sentiment. At close, the Nifty 50 declined 0.32% to settle at 24,287.65, while the Sensex slipped 0.36% to 77,728.16.

On the sectoral front, Nifty Realty, Metal and Private Bank emerged as the key outperformers, while IT, FMCG and Pharma remained the major laggards. In the broader market, Nifty Midcap 100 gained marginally by 0.05%, while Nifty Small cap 100 advanced 0.36%, indicating relatively better participation in the broader market compared with the frontline indices.

Nifty Outlook

Index formed a small bear candle with a small lower shadow which maintained lower high and lower low highlighting corrective bias. Nifty is forming lower high and lower low in the last 7 sessions, index need to break the sequence and start forming higher high and higher low in the daily chart to signal resumption of the up move. Going ahead a move above Monday’s high of 24,360 will signal pullback towards last week high of 24,620 in the coming sessions. Overall, the index is expected to extend the recent consolidation and trade in the broad range of 24,200-24,700.

Index in the last 10 sessions is seen consolidating in a narrow range retracing just 38.2% of its previous 7 sessions sharp up move from 23,606 to 24,774. A shallow retracement of its previous up move highlights a higher base formation. We believe the current breather should be used to accumulate quality stocks.

Index has immediate support at 24,200 levels being the confluence of 100 and 50-day EMA. While key short-term support is placed at 24,000-23,800 being trendline support joining last 4 months lows and 61.8% retracement of previous up move 23,606 to 24,774.

Bank Nifty Outlook

Bank Nifty formed a high wave candle as buying demand emerged from the rising trendline joining last 4 months low and 50 days EMA. The broader 8 weeks consolidation range remains intact between 56,500 and 58,700. We expect the index to extend the current consolidation and only a breakout or breakdown will signal a directional momentum. Within the consolidation index is facing resistance around 58,000 levels, a move above the same will open upside towards 58,500-58,700 levels while failure to move above 58,000 will lead to consolidation in the broad range of 57,000-58,000.

In the smaller time frame Bank Nifty in the last 10 sessions is seen consolidating in a narrow range retracing just 50% of its previous 7 sessions up move from 56,023 to 58,248. A shallow retracement signals higher base formation. On the downside, a decisive break below 57,000 (50 days EMA & rising trendline support) would signal extended corrective move towards the 56,500, which forms the lower band of the broader consolidation channel.

Above views are of the author and not of the website kindly read disclaimer