All anxious eyes now turn to the biggest event: Jerome Powell’s Jackson Hole speech on Friday at 10:00 AM ET.

Morning Action @ 7 AM – Friday, August 23rd 2024

• # GIFT Nifty is treading water indicating the benchmark Nifty could lose steam as the session pans out
• # Blame it on weak global backdrop after a weak update on US manufacturing sends the market into risk-off mode.

*7:00 AM GLOBAL UPDATE:*

• # GIFT Nifty 🇮🇳: (-27, 24833)
• # Dow Futures: (+53, 40766)
• # Nasdaq 100 Futures (+77, 19569)
• # Nikkei (-12, 38212)
• # Hang Seng (-120, 17521)
• # Dow Jones (-178, 40713)
• # Nasdaq (-300, 17619)
• # Bovespa (-1290, 135173).

*MARKET TRENDS:*

• #  Global: Negative
• #  FII: Positive (+1371.79 Cr)
• #  DII: Positive (+2971.80 Cr)
• #  Sentiment: Precarious
• #  Market Breadth: Positive
• #  Technicals: Consolidation
• #  F&O: 24000 – 25500 zone.
• #  INDIA VIX 13 (-2.48%)
• #  Nifty PCR (29th Aug) 1.32
• #  Bank Nifty PCR (28th Aug) 0.93
• #  Nifty Outlook: Caution will be the buzzword

# WHAT TECHNICALS TELLS US ON NIFTY & BANK NIFTY:

*Nifty Technically:*

• Nifty (CMP: 24812)
• SUPPORT: 24649/24444
• RESISTANCE: 24907/25100
• RANGE: 24700-24950
• BIAS: Neutral
• 21 DMA: 24518
• 50 DMA: 24245
• 200 DMA: 22336

*Bank Nifty Technically:*

• BANK NIFTY (CMP 50986):
• SUPPORT: 50547/50100
• RESISTANCE: 51357/51951
• RANGE: 50600-51500
• BIAS: Positive
• 21 DMA: 50713
• 50 DMA: 51423
• 200 DMA: 48048

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

# New data in the US showed that initial jobless claims rose slightly more than expected halfway through August, magnifying growing concerns of a moderating labor market in the US following the 818,000 downward revision to nonfarm payrolls for the year ending in March.

# Data from the S&P PMI showed that the US private economy expanded sharply in August, albeit growth was solely carried by service providers.

# The markets are on the edge even after the FOMC Minutes indicated that the Federal Reserve is set to cut rates in September.

# All anxious eyes now turn to the biggest event this week: Jerome Powell’s Jackson Hole speech on Friday at 10:00 AM ET.

# All eyes and ears will be tuned in to see if Powell:

1. Confirms a rate cut is coming in September
2. And if so, by how much
3. Or if it sounds like it may get postponed until November.

# According to the CME FedWatch Tool, Fed-funds futures now see a 73.5% chance of a 25 basis point cut in September, compared with a 26.5% chance of a 50 basis point cut. 

# WTI Oil futures consolidates near $73 per barrel.

# COMEX Gold slip towards $2489 per ounce. Please note, Gold prices are up more than 20% for the year to date.

*NEED TO KNOW:*

# After a string of gains for five days, Nifty is fast approaching its biggest hurdles at its all-time-high at 25078.30 mark.

# Please note, only above Nifty 25078.30, the most aggressive bulls will rush to revise their Nifty’s targets higher for a market that keeps raging on.

# In early action, Gift Nifty is treading water.

Blame it on a weak update on US manufacturing that sent the Wall Street into risk-off mode in overnight trade.

# The markets are on the edge despite the FOMC Minutes indicated that the Federal Reserve is set to cut rates in September.

# All anxious eyes now turn to the biggest event this week: Jerome Powell’s Jackson Hole speech on Friday at 10:00 AM ET.

# All eyes and ears will be tuned in to see if Powell:

• Confirms a rate cut is coming in September
• And if so, by how much
• Or if it sounds like it may get postponed until November.

# According to the CME FedWatch Tool, Fed-funds futures now see a 73.5% chance of a 25 basis point cut in September, compared with a 26.5% chance of a 50 basis point cut. 

# Bottom-line: Expect volatility to be hallmark as the Fed has insisted, they will remain data dependent.

# The Nifty options data suggests Nifty is likely to be in a trading range of 24000-25500 zone. Maximum Call OI is at 26000 followed by 25500 strike prices. So, the 25500 mark is now Nifty’s major resistance zone on closing basis.

Maximum Put open interest stands at 24000 levels followed by 24500 levels.

Call writing was seen at 26000 and then at 25500 strike price, while there was meaningful Put writing at 24800 and then at 24700 strike prices.

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

# The 1 stock to buy right now:

BUY LARSEN (CMP 3607): Buy at CMP. Stop at  3513. Targets  3671/3721. Aggressive targets at  3921. (Interweek Strategy). Rationale: Momentum oscillators turning bullish. Signaling a massive upside rebound.

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

• Nifty (24812): Buy on dips between 24650-24700 zone. Stop at 24309.  Zone. Targets 24900/25100. Aggressive targets at 25300-25500 zone.
• Bank Nifty (50986): Buy at CMP. Stop at 49701. Targets 51357/51750. Aggressive targets at 52100-52500 zone.

DISCLAIMER

SEBI study dated January 25, 2023 on ‘Analysis of Profit & Loss of Individual Traders dealing in equity Futures and Options (F&O) Segment’ wherein Aggregate Level findings are based on annual Profit/Loss incurred by individual traders in equity F&O during FY 2021-22.

*RISK DISCLOSURES ON DERIVATIVES:*

# 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.

# On an average, loss makers registered net trading loss close to 50,000.

# Over and above the net trading losses incurred, loss makers expended an additional 28%of net trading losses as transaction costs.

# Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

This does not construe to be an investment advice. Stock market investments are subject to market risks. All information is a point of view, and is for educational and informational use only. The author accepts no liability for any interpretation of articles or comments on this platform being used for actual investments.

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