Trading guide for Wednesday August 14, 2024: Benchmark equity indices are likely to heave a sigh of relief at today’s opening bell tracking gains in the overseas peers.
At 07:00 AM, GIFT Nifty futures quoted around 24,250 levels – hinting at a likely 100-point opening gap on the NSE Nifty 50 index today.
Going ahead into the day, the weekly Nifty and Bank Nifty expiry along with the mid-week trading holiday tomorrow on account of Independence Day may trigger bouts of volatility.
Global cues
Overnight in the US, stocks rallied on cooler-than-expected inflation data; which showed the Producer Price Index (PPI) rose 0.1 per cent on a monthly basis in July, compared with the 0.2 per cent rise expected.
Dow Jones jumped 1 per cent; NASDAQ zoomed 2.4 per cent the S&P 500 surged 1.7 per cent.
The US 10-year bond yield eased to 3.85 per cent. Gold futures hovered atop $2,500 levels, and WTI Crude Oil futures consolidated around $79 levels.
In Asia this morning, Nikkei advanced 0.5 6 per cent; Kospi soared 1 per cent, and Taiwan added 0.2 per cent.
Trading strategies in Nifty, Bank Nifty on Wednesday August 14, 2024 as per market experts:
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
On the daily scale, the Nifty has formed a bearish Marubozu candle and broke the support of the 34-Day Exponential Moving Average (DEMA) around 24,230, signaling weakness. As long as the index remains below 24,230, the downward pressure is likely to continue. On the downside, the 50-DEMA provides support near 24,020, making the 24,000-24,020 range a critical support zone for Nifty in the short term.
Technically, the Bank Nifty has formed a red candle on the daily scale, indicating continued weakness. The index is struggling to surpass the 50-DEMA, currently placed around 50,830 whereas the recent swing support is at 49,660 levels. A sustained move below 49,660 could push the index towards the 49,000 levels.
Om Mehra, Technical Analyst, SAMCO Securities
The Nifty 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.
The Bank Nifty continues to trade within a downward parallel channel, oscillating between the 38.2 per cent Fibonacci retracement level at 50,600 and the 50 per cent level at 49,700. The 50,000 level being repeatedly tested and breached, the next critical support has shifted downward toward the 48,800 level.
Dhupesh Dhameja, Technical Analyst, SAMCO Securities
The market outlook has turned decisively bearish. The Nifty is facing strong rejection from its 20 DEMA, and the breakdown of the bearish flag pattern suggests continued weakness. A sustained move below 24,100 could lead to intensified selling pressure, with 24,000 being a crucial level to watch closely.
The market outlook for Bank Nifty has turned bearish. With the index trading below key moving averages and the RSI falling below 40, bearish sentiment is gaining strength. If the index breaks below 49,600, it could trigger a breakdown of its trading range, prompting buyers to exit their positions. On the upside, 50,500 will act as an immediate resistance.
Rajesh Bhosale, Equity Technical Analyst, Angel One
On the hourly chart, the breakdown below the key trend line support signals the first signs of bearishness. It now appears likely that Nifty will test the 50-day EMA support in the 24,040 – 24,000 range and potentially dip below the recent low of 23,900. With the upcoming weekly expiry for both Nifty and Bank Nifty, increased volatility is expected today.
Rupak De, Senior Technical Analyst, LKP Securities
The near-term trend appears negative. On the upside, 24,250 now serves as a new resistance level. On the downside, initial support is around 24,000; below this level, it may decline towards 23,700.
Fund flow activity – Here’s an update on the latest FII, DII trading activity
On Tuesday, foreign institutional investors (FIIs) were net sellers of stocks to the tune of Rs 2,107.17 crore; thus far in August FIIs have net sold shares worth Rs 27,148.16 crore in the cash segment. On the other hand, domestic institutional investors (DIIs) net bought shares worth Rs 1,239.96 crore on August 13, taking their monthly buy tally to Rs 29,217.70 crore.
In the derivatives segment, FIIs net sold 36,291 contracts of index futures for a consideration of Rs 2,421.44 crore on August 13. FIIs net sold 19,585 contracts of Nifty futures, 15,126 contracts of Bank Nifty futures and 347 contracts of MidCap Nifty futures.
Pursuant to which, FIIs long-short ratio in index futures eased below 1 per cent for the first time since June 18; the ratio now stands at 0.9:1 – and it implies that foreign investors hold little nearly 1 long position in index futures for every single bet on the short side of trade. The FIIs longs in index futures stood at 48.05 per cent.
Stocks in F&O ban period
A total of 16 stocks are under the futures & options ban period on Wednesday, August 14 – Aarti Industries, Aditya Birla Capital, Aditya Birla Fashion Retail, Bandhan Bank, Biocon, Birlasoft, Chambal Fertilisers, Granules India, India Cements, IndiaMart Intermesh, LIC Housing Finance, Manappuram Finance, PNB, RBL Bank, SAIL and Sun Tv.
Primary market update
Saraswati Saree Depot Rs 160 crore IPO was subscribed 16.5 times at the end of Day 2 of the offer period.
NSE SME – Solve Plastic Products Rs 11.85 crore IPO was subscribed up to 2 times. Whereas, BSE SME – Broach Lifecare Hospital Rs 4.02 crore IPO was subscribed up to 8.7 times at the end of Day 1 of the offer period.
Positron Energy, and Sunlite Recycling Industries IPOs will close today – these issues were subscribed up to 55.8 times and 25.4 times, respectively, at the end of Day 2 on the NSE SME platform.
