Will Market Bounce or Further Weakness on the Cards?

WEEKLY EQUITY BULLETIN 14 AUGUST TO 18 AUGUST 2023

The impact of liquidity measures and inflation concerns addressed by the RBI continued to influence the equity market during the session on August 11th. As a result, the benchmark Nifty50 experienced a decline, dipping below the 19,500 mark after a period of consolidation lasting four days.

During this session, the Nifty50 witnessed a decrease of 115 points, settling at 19,428. This movement was reflected in the formation of a substantial bearish candlestick pattern on the daily charts, accompanied by the breaking of a long upward-sloping support trendline.

Correspondingly, the BSE Sensex displayed a decline of 365 points, closing at 65,323. While the Nifty Midcap 100 and Smallcap 100 indices also underwent corrections, they outperformed the benchmarks by experiencing milder declines of 0.5 percent and 0.2 percent, respectively.

Nifty Futures

Analyzing the situation on a weekly basis, the Nifty demonstrated a rupture of the rising trendline in a downward direction, resulting in a close below this line on the chart. Furthermore, the momentum indicator RSI recently crossed below the midpoint on the daily chart, signaling the potential for further downside movement in the coming days. Presently, a significant level of support exists around the 19,350 mark. Should this support be breached and the Nifty close below 19,350, it may test the 19,200 level. Subsequent weakness might be anticipated if the Nifty closes below the 19,200 threshold, extending potentially until the 19,000 level during the forthcoming sessions.

Conversely, a notable hurdle looms around the 19,700 mark. A successful close above this point could pave the way for a fresh upward movement, potentially reaching levels between 19,850 and 19,950 in the upcoming trading sessions.

Intraday Levels

Nifty Future exhibits immediate support around 19,450. A breach below this level could lead to intraday downward movement, reaching levels in the vicinity of 19,380 to 19,350. On the other hand, resistance is observed near the 19,600 mark. A break above this resistance could trigger an intraday upside movement, potentially advancing to levels around 19,700 to 19,750 in the upcoming trading session.

Bank Nifty Future

The weekly perspective reveals the formation of a three-black shoulder pattern at higher levels. Notably, Bank Nifty recently broke through a pivotal support level. The near-term resistance threshold resides around 45,000. If this resistance is surpassed and sustained, it could trigger an upward rally, potentially progressing to levels of approximately at 45,400 and even extending further to 45,600 in the upcoming trading sessions.

Conversely, a crucial support point is identified around 44,300. A close below this level could lead to a downward movement, possibly descending to levels around 44,000 and subsequently to 43,800 in the upcoming trading sessions.

Intraday Levels

Bank Nifty Future, resistance is situated near 44,750. Should this level be breached, it might usher in an intraday upside movement, potentially reaching levels around 44,950.

Conversely, support is anticipated at around 44,400. A breach below this support could trigger intraday selling pressure, driving the price down to levels around 44,200 to 44,000 during the Monday trading session.

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