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Equity benchmarks commenced the holiday-shortened trading week on a buoyant note, with both the Nifty 50 and Sensex registering modest gains on Monday, August 25. A dovish tilt in commentary from U.S. Federal Reserve Chair Jerome Powell during his recent address bolstered expectations of a potential rate cut, catalyzing a wave of risk-on sentiment across global equities. The Nifty 50 index opened on a firm footing, reflecting positive global cues, and traded within a narrow consolidation band for the majority of the session. It ultimately settled at 24,967.75, marking an increment of 98 points or 0.39% on a closing basis. The Sensex followed suit, exhibiting similar resilience and mirroring the uptrend.

The broader market indices, however, displayed a more subdued undertone, with the Nifty Midcap 100 inching up by 0.12% and the Nifty Small cap 100 closed on a flat note, indicating a mixed undertone in the secondary space. Sectorally, buying interest was notably pronounced in Information Technology stocks, with the Nifty IT index surging 2.4%, buoyed by a weaker dollar and improved global risk appetite. The Realty pack also garnered traction, adding 0.7%, while the Metal index advanced 0.65%, supported by a rebound in global commodity prices.

Nifty Outlook

The index formed a small-bodied bull candle with long shadows in either direction which remained contained inside previous session price range signaling consolidation around the 25,000 levels. Going ahead, a follow through strength above Monday’s high (25021) will open upside towards the immediate resistance area of 25,160-25,250 in the coming truncated week being the confluence of the key retracement area and the previous swing high. While immediate support is placed at 24840 levels being the presence of 20- & 50-days EMA. We recommend a staggered accumulation approach, focusing on fundamentally sound counters, particularly those likely to be beneficiaries of the upcoming GST rationalization. While we revise the short-term support base higher towards 24,600-24,400 levels being the confluence of the 100 days EMA and last Monday’s gap area.

Bank Nifty Outlook

Bank Nifty formed a doji candle with a lower high and lower low signaling consolidation around the 55,000 levels. Index in the last 3 weeks has been consolidating in the range of 54,800-56,300. Only a movement beyond this range will signal the next directional move. Immediate support is placed at 55,000-54,800 — a region that aligns with the 100-day exponential moving average (EMA) and key Fibonacci retracement levels from the prior upward move. A breach below 54,800 will open downside towards 54,000 levels. On the higher side immediate resistance is seen around 55,750 levels while key resistance is seen at 56,300 levels, which corresponds to the recent breakdown area and the 50% retracement of the entire decline (57628-54905). 

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