The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open higher on Monday, tracking strong global market cues, after US Federal Reserve Chair Jerome Powell’s Jackson Hole speech hinted at interest rate cut at the Fed’s September meeting.
The trends on Gift Nifty also indicate a positive start for the Indian benchmark index. The Gift Nifty was trading around 24,953 level, a premium of nearly 55 points from the Nifty futures’ previous close.
On Friday, the equity market ended lower, with the benchmark indices snapping their six-day winning streak.
The Sensex dropped 693.86 points, or 0.85%, to close at 81,306.85, while the Nifty 50 settled 213.65 points, or 0.85%, lower at 24,870.10.
Here’s what to expect from Sensex, Nifty 50, and Bank Nifty today:
Sensex Prediction
The Indian stock market staged a strong comeback last week, with the BSE Sensex gaining 0.88% last week.
“Technically, the 81,900 level or the 50-day SMA will be key for traders. Below this level, the correction could slip to the 20-day SMA, or around 81,100 – 81,000. Further downside may also continue, potentially dragging Sensex down to 80,700 – 80,400. Conversely, a fresh uptrend rally is possible only after the index sustains above 81,900 or the 50-day SMA,” said Amol Athawale, VP technical Research, Kotak Securities.
The immediate resistance for Sensex would be at 82,500 and a successful breakout above 82,500 could push the index towards 83,300, he added.
Mayank Jain, Market Analyst, Share.Market said that the Sensex faces immediate resistance in the 82,000 – 82,200 zone, and a sustained move above this range could drive the index toward 82,500.
“Strong weekly support has shifted to 80,700 – 80,500. A break below this zone may embolden sellers, dragging the index down to 80,200 – 80,000,” said Jain.
Nifty OI Data
Strong put writing at the 24,800 and 24,900 strike levels suggests firm support zones around 24,650 – 24,700, while call writing at 25,000 and 25,100 highlights immediate resistance areas around 25,080 – 25,120.
“A breakdown below 24,600 could lead the Nifty 50 index lower toward the 24,350 – 24,250 zone, whereas a sustained breakout above 25,120 may clear the path toward 25,400 – 25,550. Until a decisive move occurs on either side, the index is expected to remain range-bound within the 24,600 – 25,120 corridor,” said Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities.
Nifty 50 Prediction
Nifty 50 rallied 0.97% last week and formed an inverted hammer on the weekly chart, a bearish signal indicating sustained selling pressure at higher levels.
“A long bear candle was formed on the daily chart which indicates a formation of short-term reversal pattern on the downside. The immediate hurdle of the down sloping trend line weighed high on the market and resulted in sharp weakness,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
According to him, the short-term trend of Nifty 50 is weak and expects the index to find support around the previous opening upside gap of 18th August around 24,800 – 24,700 levels by this week. On the other side, a sustainable upside above 25,150 could bring bulls back into the scene.
Sudeep Shah of SBI Securities said that the Nifty 50 index formed an Evening Star candlestick pattern on the daily chart, which is typically viewed as a bearish reversal signal.
“This pattern, coupled with the rejection at a key Fibonacci level, suggests that the bulls may be losing grip, and a period of consolidation or a corrective move could be on the cards unless fresh positive triggers emerge. Most noteworthy, during this pullback rally, the RSI failed to cross the 60 mark,” Shah said.
Going ahead, he believes the zone of the 100-day EMA of 24,650 – 24,600 level will act as important support for the index. While on the upside, the zone of 25,050 – 25,100 will act as a crucial hurdle for the index. Any sustainable move on either side will lead to a trending move in the Nifty 50 index.
Mayank Jain of Share.Market noted that the Nifty 50 now faces resistance at 25,100 – 25,200, which marks the upper end of this week’s range and an important resistance zone. On the downside, support lies at 24,800 – 24,700, and a breach of this range could trigger a corrective decline toward 24,400 – 24,300.
Bank Nifty Prediction
Bank Nifty index declined 606.05 points, or 1.09%, to close at 55,149.40 on Friday, forming a sizable bearish candle with a lower high and lower low, indicating continuation of the prevailing downtrend. For the week, the index declined 0.35%, forming a dark cloud cover pattern (bearish) on the weekly chart.
“The Bank Nifty resumed its downtrend after a brief pause, forming a bearish candle on the weekly chart. It underperformed the Nifty index, slipping below its 100-DMA at 55,360 and continues to trade beneath all key short-term moving averages. On the weekly timeframe, momentum indicators and oscillators have turned bearish with a sell crossover,” said Nilesh Jain, Head – Technical and Derivatives Research Analyst (Equity Research), Centrum Broking Ltd.
At this stage, the Bank Nifty index remains under pressure, with a breach below 54,900 likely to extend the decline towards 54,400. On the other hand, a move above the psychological mark of 56,000 could trigger a short-covering rally towards 56,500 – 57,000, he added.
Hrishikesh Yedve, AVP Technical and Derivative Research, Asit C. Mehta Investment Intermediates Ltd. highlighted that the immediate support for Bank Nifty lies at the 100-DEMA which is placed near 55,025, while a strong support base is placed around 54,900.
“A sustained move below 54,900 could extend the decline towards 54,500 – 53,900 levels. On the upside, the 55,950 – 56,160 zone will act as a key resistance area in the near term. Thus, traders are advised to remain cautious in Bank Nifty and avoid aggressive long positions,” Yedve said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.