Nifty50 Remains Range-Bound Despite Global Rally, Sell on Rally Strategy Advised
The Nifty50 index in India has been experiencing a range-bound movement despite a global rally in markets. Experts are recommending a sell-on-rally strategy as long as the index remains below the 19,500 mark. The market closed flat after a volatile day of trading, with the Nifty50 rising only 3 points to 19,397. This lack of movement and resistance at the 21-day exponential moving average (EMA) suggests a feeble sentiment in the market.
Analysts predict that the Nifty50 will continue to fluctuate within a range of around 200-250 points, with resistance at 19,450-19,500 and crucial support at 19,300-19,250. The market’s inability to break above the 19,500 mark indicates a lack of support at higher levels.
On the other hand, the broader markets showed strength, with the Nifty Midcap 100 index rising 1.1 percent and the Smallcap 100 index gaining 0.8 percent. The overall breadth of the market was positive, with a 3:2 ratio of advancing to declining stocks.
To help investors spot profitable trades, we have compiled 15 data points that provide insights into the current market conditions. It is important to note that the open interest (OI) and volume data of stocks are aggregates of three-month data, not just the current month.
Key support and resistance levels for the Nifty are as follows:
– Support: 19,383, 19,369, 19,345
– Resistance: 19,431, 19,446, 19,469
For the Bank Nifty, support levels are at 43,947, 43,896, and 43,815, while resistance levels are at 44,109, 44,159, and 44,240. The Bank Nifty has been stuck in a range between 43,600 and 44,100, lacking momentum on either side.
Options data shows that the maximum weekly Call open interest (OI) is at the 19,400 strike, indicating a key resistance level for the Nifty. Call writing has been seen at the 19,400 strike, while Put writing is observed at the 19,200 strike. The maximum Put open interest is at the 19,300 strike, indicating important support for the Nifty.
In terms of specific stocks, a high delivery percentage suggests investor interest in Torrent Pharmaceuticals, UltraTech Cement, Berger Paints, HCL Technologies, and Larsen & Toubro. On the other hand, stocks like Coromandel International, Metropolis Healthcare, Colgate Palmolive, Zydus Lifesciences, and Oracle Financial saw long unwinding based on the OI percentage, indicating a decline in OI and price.
Short build-up was observed in stocks like Gujarat Gas, Deepak Nitrite, Ramco Cements, BPCL, and Bajaj Finserv, with an increase in OI along with a fall in price indicating a build-up of short positions.
There was short-covering observed in stocks like ICICI Prudential Life Insurance, Aditya Birla Capital, Dalmia Bharat, L&T Technology Services, and Birlasoft. Short-covering suggests a decrease in OI along with a price increase.
In terms of bulk deals, SJS Enterprises saw a significant stake sold by promoter entity Evergraph Holdings. However, there were also several investors who bought a stake in SJS.
Other stocks in the news include TVS Supply Chain Solutions, which will make its debut on the BSE and NSE, Piramal Enterprises, which approved the public issuance of non-convertible debentures (NCDs), and Vodafone Idea, which plans to clear its dues to the government by September.
BEML has received an order from the Ministry of Defence, and RITES has emerged as the lowest bidder in a tender floated by the Railway Board. Bharat Forge has revised the validity period for a guarantee provided to its subsidiary.
Foreign institutional investors (FIIs) sold shares, while domestic institutional investors (DIIs) purchased shares on August 22.
The NSE has added BHEL and Escorts Kubota to its F&O ban list for August 23, while Chambal Fertilisers & Chemicals was removed from the list.
In summary, the Nifty50 remains range-bound despite a global rally, with experts recommending a sell-on-rally strategy. The market lacks support at higher levels, and the index is expected to remain within a certain range. Investors should closely monitor support and resistance levels and consider the data points mentioned to make informed trading decisions.
