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The Indian stock market is poised for a subdued opening on Thursday, August 21, as benchmark indices Sensex and Nifty 50 are expected to mirror the mixed signals emanating from global markets. This forecast stems from the trends observed on Gift Nifty, which suggests a marginal premium for the Indian benchmark index. Specifically, the Gift Nifty was trading around the 25,085 level, indicating a premium of approximately 2 points compared to the Nifty futures’ previous closing price. The previous trading day witnessed the equity market extending its bullish momentum for the fifth consecutive session, a notable achievement that propelled the Nifty 50 to close above the significant 25,000 threshold. The Sensex, in particular, demonstrated a positive trend, rising by 213.45 points, equivalent to a 0.26% increase, to conclude the day at 81,857.84. Similarly, the Nifty 50 also experienced gains, settling 69.90 points, or 0.28%, higher at 25,050.55. These figures underscore the overall positive sentiment that has been prevailing in the Indian stock market recently, although the expected flat opening suggests a potential pause or consolidation in this upward trajectory. The current market dynamics necessitate a careful assessment of various factors influencing investor behavior and market movements. These factors include global economic indicators, corporate earnings reports, and geopolitical developments, all of which can exert significant pressure on stock prices and overall market sentiment. Therefore, market participants are advised to remain vigilant and adopt a strategic approach to navigate the complexities of the Indian stock market in the coming days.
Analyzing the technical aspects of the Sensex, it is observed that the index formed a bullish candle on the daily charts, coupled with an uptrend continuation formation on intraday charts. This combination suggests the potential for further upward movement from the current levels. Shrikant Chouhan, Head of Equity Research at Kotak Securities, highlighted the significance of the Sensex successfully clearing the 81,500 resistance zone. According to Chouhan, this breakout has intensified the positive momentum, and for day traders, the 81,500 and 81,300 levels will serve as crucial support zones. As long as the Sensex remains above these levels, the prevailing bullish sentiment is expected to persist. On the upside, Chouhan anticipates that the index could potentially advance to the 82,300 – 82,500 range. Conversely, a breach below the 81,300 level would render the uptrend vulnerable. Mayank Jain, a Market Analyst at Share.Market, further elaborated on the potential resistance and support levels for the Sensex. Jain identified the next resistance zone for the Sensex as being between 82,600 and 82,800, suggesting that a strong move above this range could pave the way for further upside. On the support side, Jain pointed to the 81,500 to 81,300 range, warning that a break below this level could trigger some short-term volatility. These technical analyses provide valuable insights for traders and investors looking to make informed decisions based on the potential movements of the Sensex.
Examining the Nifty's Open Interest (OI) data reveals critical insights into potential resistance and support levels. The highest Call Open Interest (OI) for Nifty is observed at the 25,100 strike, followed by the 25,200 strike, indicating that these levels could act as significant resistance zones. On the Put side, the highest OI is placed at the 25,000 strike, followed by the 24,900 strike, highlighting strong support levels. Hardik Matalia, Derivative Analyst - Research at Choice Equity Broking, suggests that this OI setup indicates the 25,000 – 25,100 range will be crucial for Nifty’s near-term movement. A breakout on either side of this range is likely to dictate the next directional trend. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, notes that the Nifty 50 index formed a strong bullish-bodied candlestick on the daily chart, signaling renewed strength in the index. Shetti believes that the short-term trend of Nifty 50 continues to be positive, and further upside from here could pull Nifty 50 towards the next overhead resistance of 25,300 in the short term. Immediate support is placed at 24,900. Dr. Praveen Dwarakanath, Vice President of Hedged.in, cautioned that while the Nifty 50 made a bullish candle, it also featured a big shadow on both sides, indicating uncertainty in the move. Dwarakanath also pointed out that momentum indicators are rising towards the overbought region, which could potentially push the index down in case of a gap-up opening. Mayank Jain identified the next resistance zone for Nifty 50 as being between 25,100 and 25,200, where selling has previously occurred, and support is seen around 24,850 – 24,750. If this support breaks, the index may slide toward the 24,600 - 24,500 zone. These analyses, taken together, emphasize the importance of monitoring key support and resistance levels and exercising caution due to potential market volatility.
In contrast to the Sensex and Nifty 50, the Bank Nifty index underperformed the frontline indices on the previous day, ending 166.65 points, or 0.30%, lower at 55,698.50. This resulted in the formation of a small bear candle, signaling consolidation amid stock-specific action. Bajaj Broking Research noted that buying demand in the last few sessions has emerged from the 100-day EMA. The firm anticipates that the Bank Nifty index will extend consolidation in the range of 54,800 - 56,300. A movement beyond this range will signal the next directional move. The key support area is identified as 54,800 and 55,000, aligning with the 100-day EMA and key Fibonacci retracement levels from the prior upward move. A breach below 54,800 could open downside towards the 54,000 levels. On the higher side, resistance is seen around the 56,000 – 56,300 range, corresponding to the recent breakdown area and the 50% retracement of the entire decline (57,628 - 54,905). Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, highlighted that the Bank Nifty index now trades below its key short-term moving averages of 20 & 50 DEMA. Key support is seen at 55,600 – 55,550 levels, a break below which could open doors to 55,400 – 55,350. Immediate resistance is at 55,950 – 56,000. The Bank Nifty's current technical setup suggests a period of consolidation, with potential for breakout or breakdown depending on price action around key support and resistance levels.
Source: Nifty 50, Sensex today: What to expect from Indian stock market in trade on August 21