In early trade on August 18, markets will react to the outcome of AGR hearing. On the global front, participants will closely watch the US and China tussle.
The Nifty50 snapped its three-day losing streak on August 17 to reclaim 11,200 levels. The S&P BSE Sensex also climbed above 38,000 but experts are not convinced with the price action on D-Street.
The Nifty50 closed above 11,200, which is a good sign, but the index moved in the trading range of August 14. The market also faced selling pressure at higher levels, which suggests that climbing 11,300-11,400 will not be easy.
Buying at lower levels gives assurance that it would not be easy for the Nifty50 to slip below 11,100-11,000 levels.
India VIX fell by 1.68 percent at 21.30 levels after rising on August 14. Overall lower volatility suggests a limited downside and support-based buying could again emerge at lower levels, experts say.
Maximum Put OI is placed at 11,000 followed by 10,000 strikes, while maximum Call OI is at 11,500 followed by 12,000 strikes.
The Nifty50 registered a Doji candle as it smartly recoiled after almost testing its 20-day EMA, whose value is placed at around 11,120 levels before signing off the session to close at the opening tick itself.
“The current bounce without breaching last Friday’s low shall not be construed as end of the correction which appears to have triggered in last Friday’s session unless Nifty registers a close above 11366 levels,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“In that scenario uptrend shall resume with an initial target of 11,450 levels. But, as the near-term trend appears to be tilting in the favour of the bears, especially with the fall of last Friday’s session, a breach of 11,111 shall once again set the ball rolling in the favour of the bears and in that case, index shall head towards 10,882 levels,” he said.
Traders should remain neutral on the index and focus on stock-specific opportunities, Mohammad said. Fresh shorting opportunity shall rise on a close below 11,120.
Also Read: Gainers & Losers: 10 stocks that moved the most on August 17We have collated views of experts on what investors should do on August 18 when the market resumes trading:
Expert: Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities
The Nifty exhibited uncertainty in the first half of the session but closed at the highest level of the day on buying in metals and automobile stocks.
The rally in metal and auto stocks is largely due to the Singapore and China promising to support their coronavirus-hit economies.
If the Nifty stays above 11270, it can go up to 11,350. Below 11,180, the Nifty can slip to 11,110 or 11,000. The market breadth was positive and volumes decent.
Expert: Chandan Taparia, Vice President, Analyst-Derivatives, Motilal Oswal Financial Services Limited
The Nifty formed an Inside Bar pattern on the daily scale as it moved inside the trading range of the previous session, which indicates that declines were being bought and the major trend remains intact.
The Nifty has to hold above 11,250 to move towards 11,350-11,400 while on the downside, support exists at 11,150 then 11,100 zones.
The Nifty Bank formed a bearish candle and now it has to cross and hold above 22000 zones to witness an upmove towards 22,250 and 22,500 zones, while on the downside, immediate support is seen at 21,500 then 21,250.
Expert: Ajit Mishra, VP - Research, Religare Broking Ltd
Markets will first react to the outcome of AGR hearing in early trade on August 18. On the global front, participants are closely watching the US and China tussle.
Besides, the upcoming OPEC meeting is also on their radar. We, thus, advise continuing with a positive yet cautious stance and maintaining focus on overnight risk management.
Expert: Sumeet Bagadia, Executive Director at Choice Broking
After opening with a gap-up, the Nifty made an intraday low of 11,144.50 but recovered to close at 11,250 metal and auto sector stocks surged.
On the hourly chart, the Nifty closed with a bullish candle but the index is facing resistance from 21-HMA (hull moving average) which if crossed, can show an upside movement. At the present level, the Nifty is having support at 11,090 levels while resistance comes at 11,400-11,450.
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