The Running of Nifty Bulls Shall continue…

Morning Action @ 7 AM – Tuesday, August 20th  2024

• # Gift Nifty takes over the positive baton from a strong finish at Wall Street in Monday’s trade.
• # The positive catalyst: WTI Oil futures slumps below $74 per barrel on reports of cease-fire talks in Gaza and concerns about weakening demand, particularly from China. 

*7:00 AM GLOBAL UPDATE:*

• # GIFT Nifty 🇮🇳: (+52, 24660)
• # Dow Futures: (-69, 40827)
• # Nasdaq 100 Futures (-7, 19760)
• # Nikkei (+423, 37823)
• # Hang Seng (+140, 17570)
• # Dow Jones (+237, 40897)
• # Nasdaq (+245, 17877)
• # Bovespa (+1825, 135778).

*MARKET TRENDS:*

• #  Global: Positive
• #  FII: Negative (-2667.46 Cr)
• #  DII: Positive (+1802.92 Cr)
• #  Sentiment: Bullish
• #  Market Breadth: Positive
• #  Technicals: Rebound play
• #  F&O: 23900 – 25000 zone.
• #  INDIA VIX 14.31 (-0.63%)
• #  Nifty PCR (29th Aug) 1.33
• #  Bank Nifty PCR (28th Aug) 0.77
• #  Nifty Outlook: Up again for benchmark Nifty.

# WHAT TECHNICALS TELLS US ON NIFTY & BANK NIFTY:

*Nifty Technically:*

• Nifty (CMP: 24573)
• SUPPORT: 24457/24205
• RESISTANCE: 24701/25100
• RANGE: 24500-24750
• BIAS: Positive
• 21 DMA: 24482
• 50 DMA: 24147
• 200 DMA: 22251

*Bank Nifty Technically:*

• BANK NIFTY (CMP 50368):
• SUPPORT: 50000/49651
• RESISTANCE: 51151/51951
• RANGE: 50000-50900
• BIAS: Neutral
• 21 DMA: 50896
• 50 DMA: 51351
• 200 DMA: 47928

*WHAT EXACTLY HAPPENED AT WALL STREET IN OVERNIGHT TRADE:*

• # Wall Street finishes Monday’s session on a buoyant note, with all three main indexes building on last week’s impressive gains.
• # The street is upbeat ahead of Jackson Hole Economic Symposium, where the Fed Chair Powell will deliver a highly anticipated speech on Friday, August 23rd –also will give clues on when the central bank will start cutting interest rates and by how much.
• # Hopefully, Powell is likely to give a more dovish signal…
• # From here on, the street will spy with one big eye on the US September jobs report to be wired on September 6th.
• # Hopefully, this September unemployment report gets the Fed to cut interest rates by 50 basis points. Fingers crossed.
• # WTI crude futures slump towards $73.33 a barrel.
• # COMEX Gold trades with positive bias, now at $2,505.

*NEED TO KNOW:*

# The Good News: Gift Nifty is pointing to a higher start indicating Nifty is on track for its 3rd win a row.

Technically speaking, Nifty is holding above its 21 DMA and most importantly, bulls are aiming to erase early August market downfall.

# Interestingly, the gains are despite FIIs pessimism.

Please note, FIIs are on the sell side and have sold shares worth Rs 30,000 crores since the Union Budget.

# Much of the strength and rally at Dalal Street is in the backdrop of steady SIP flows by retail investors.

DIIs so far in August have net bought stocks worth Rs 31,450 crore.

DIIs have reportedly invested Rs 2.92 lakh crore in Indian equities thus far.

# All bullish eyes on the two big events of the week:

1. The July FOMC meeting minutes to be released Wednesday, August 21st.

• Fed Chair Jerome Powell’s speech at the Jackson Hole conference on Friday.

# We will however spy with one big eye if Powell echoes the market drum of hinting with a 50 bps move.

# Long story short: The running of Nifty bulls shall continue.

# The Nifty options data suggests Nifty is likely to be in a trading range of 24000-25000 zone. Maximum Call OI is at 25000 followed by 24600 strike prices. So, the 25000 mark is now Nifty’s major resistance zone on closing basis.

Maximum Put open interest stands at 24000 levels followed by 23900 levels.

Call writing was seen at 24600 and then at 25000 strike price, while there was meaningful Put writing at 23900 and then at 24600 strike prices.

# Now, here is the preferred trade on Nifty and Bank Nifty:

• Nifty (24573): Buy at CMP. Stop at 24159. Targets 24630/24750. Aggressive targets at 24900-25100 zone.
• Bank Nifty (50368): Buy at CMP. Stop at 49301. Targets 50950/51137. Aggressive targets at 51900-52100 zone.

# Our chart of the day is bullish on AUROBINDO PHARMA, JINDAL STEEL & POWER, NAUKRI and TVS MOTORS on any early weakness with an interweek perspective.

# The 1 stock to buy right now:

BUY SHRIRAM FINANCE (CMP 3076): Buy at CMP. Stop at  2969. Targets  3151/3221. Aggressive targets at  3305. (Interweek Strategy). Rationale: Signalling a massive upside consolidation breakout. Momentum oscillators bullish.

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