Nifty Outlook for 25 August 2023
Our markets started the weekly expiry day on a positive note, but it failed to rally higher and it corrected gradually throughout the day to end below 19400 with a marginal loss.
Nifty rallied higher in the opening hour of the trade on Thursday, but the option writers started selling call options post the first hour of the trade. Initially, 19600 call witnessed addition in open interest, but as the day progressed, selling was seen at lower strike price calls as well. Hence, our markets remained subdued throughout the day and Nifty ended below 19400 mark. In last couple of sessions, the indices had witnessed a pullback back post forming a support base around 19300 mark. We did see a breakout from the falling trendline resistance, but there’s no follow up buying seen on Thursday. In the recent pullback move also, Nifty had resisted around the 19600-19650 range and thus this remains a crucial hurdle to be surpassed for a resumption of the uptrend. On the other hand, 19300-19250 would continue to be a strong support zone on declines. Now the midcap index has seen a decent outperformance in last one month and the momentum readings on the lower time frame charts have given a negative crossover. Although this is not a confirmation of any trend reversal, at least it is a sign of possibility of some profit booking in the midcap space in the short term. Hence, short term traders should be watchful here and avoid chasing the stocks at higher levels and rather keep a buy-on-dip approach.
Nifty gave up opening gains, no follow up buying on weekly expiry day
In the monthly options (expiry next week), 19500 call options witnessed significant rise in open interest today indicating hurdle there. Thus, 19300-19250 will be seen as support while 19500 will be the initial resistance followed by 19650. Nifty could continue to trade within this range and it breaks on either side, then a directional move should be expected.
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