Trading guide for Friday, August 16, 2024: Benchmark equity indices are likely to start Friday’s trading session on an optimistic note mimicking solid gains in global markets.
At 07:00 AM, GIFT Nifty futures quoted around 24,325 levels – hinting at a likely 150-point opening gap on the NSE Nifty 50 index today.
Global stocks rally as hopes of US rate cut rise
Overnight in the US, stocks rallied sharply after bets on US rate cut in September rose on further positive economic data. Day after the Consumer Price Index posted its lowest year-over-year increase in 3 years, retail sales superseded Wall Street expectations with 1 per cent growth in July as against an expectation of 0.4 per cent.
Dow Jones rallied 1.4 per cent, and the NASDAQ zoomed 2.3 per cent. The S&P 500 gained 1.6 per cent and was up for the sixth straight trading session. The latter two indices had recouped almost all the losses so far in August.
The US 10-year bond yield hovered around 3.92 per cent. Gold futures consolidated around $2,500-mark, WTI Crude Oil futures eased to $78 per barrel.
In Asia this morning, Nikkei has surged 2.6 per cent; Kospi jumped 1.5 per cent, and Straits Times 1.2 per cent. Taiwan, however, was down 0.6 per cent.
Trading strategies in Nifty, Bank Nifty on Friday August 16, 2024 according to market experts:
Om Mehra, Technical Analyst, SAMCO Securities
On Wednesday, the Nifty formed a bearish candle with a large body on the daily chart. The index is currently displaying a bearish flag pattern, signaling potential downside risk. The overall trend remains neutral to negative.
The Nifty is likely to face further downside if it breaks below the critical 24,000 level, potentially extending losses toward 23,900-23,800. On the upside, a decisive close above 24,350 would be necessary to signal a reversal and resumption of an uptrend.
Dhupesh Dhameja, Technical Analyst, SAMCO Securities
Wednesday’s low of 24,100 on the Nifty is a critical level to watch; if broken and sustained, it could confirm a breakdown of the bearish flag pattern on the daily chart. The index is now encountering significant resistance from its 10 and 20-day Exponential Moving Averages (DEMA), contributing to the downward pressure. The 24,000 mark is a crucial psychological support level, reinforced by substantial put writing activity.
The Bank Nifty index has been trading within a range, attempting to sustain above its critical support levels of 49,800-49,600. Should the index manage to hold above the 49,600 level, it could confirm a bullish divergence on the 1-hour charts, potentially leading to a pullback towards the immediate resistance levels of 50,300 – 50,500.
Rajesh Bhosale, Equity Technical Analyst, Angel One
The trading range for Nifty is between 23,900 and 24,500; with 24,000 on the lower side and 24,350 on the upper side as critical hurdles. A significant move is anticipated once this range is broken. The broader market remains under pressure, reflecting a bearish tone, with only selective stocks performing well.
Rupak De, Senior Technical Analyst, LKP Securities
The overall trend is likely to remain weak, as the Nifty continues to trade below the initial resistance level of 24,250. Additionally, the index has been sustaining below the middle Bollinger Band, confirming a weak near-term trend. This weakness might push the index towards 23,900/23,700. On the higher end, resistance is expected at 24,250/24,500.
Fund flow activity – Here’s an update on the latest FII, DII trading activity
On Wednesday, foreign institutional investors (FIIs) net stocks to the tune of Rs 2,595.27 crore; thus taking the monthly outflows to Rs 29,743.43 crore in the cash segment. On the other hand, domestic institutional investors (DIIs) net bought shares worth Rs 4,477.73 crore on August 14; taking their monthly buy tally to Rs 31,453.91 crore.
In the derivatives segment, FIIs net sold 9,311 contracts of index futures for a consideration of Rs 769.48 crore on August 14. FIIs were net buyers of 5,357 contracts of Nifty futures; while the net sold 14,140 contracts of Bank Nifty futures and 329 contracts of MidCap Nifty futures.
Pursuant to which, FIIs long-short ratio in index futures remained around 0.9:1 – this ratio implies that foreign investors hold near about 1 long position in index futures for every single bet on the short side of trade. The FIIs longs in index futures stood at 47.24 per cent.
Stocks in F&O ban period
Biocon, Bandhan Bank, PNB, NMDC and SAIL among 19 stocks placed under the futures & options ban period for Friday, August 16. Aarti Industries, Aditya Birla Capital, Aditya Birla Fashion Retail, Birlasoft, Chambal Fertilisers, GNFC, India Cements, IndiaMart Intermesh, LIC Housing Finance, Manappuram Finance, Piramal Enterprises, RBL Bank and Sun Tv were other stocks.
New listing today
Aesthetik Engineers Rs 24.47 crore to list on the NSE SME platform today. The issue quoted around 75 per cent premium in grey market deals.
Primary market update
NSE SME – Solve Plastic Products IPO was subscribed up to 7.1 times. Whereas, BSE SME – Broach Lifecare Hospital IPO was subscribed up to 30.3 times at the end of Day 2 of the offer period.
