Nifty outlook: On the last trading day of last month, the process of decline in the domestic stock market on Friday 29 August continued till the third consecutive session. The Nifty closed 74 points to close at 24,427. The Nifty has so far slipped 750 points from the recent swing high 25,153. The index is 1.78% broken on a weekly basis, which is the biggest decline in the last five months. The major reason for the market pressure was the announcement of frequent selling at upper levels and 50% tariff on Indian exports by the US.
Now on the first business day of the new month i.e. on Monday 1 September, how will the Nifty move, which level will be important, will understand it from experts, but before that we know what happened in the market on Friday.
Decline in overall market
Bodder markets also showed weakness. Nifty midcap 100 and smallcap 100 closed down 0.6% and 0.4% respectively. Realty, auto and IT remained under the highest pressure in the sectoral index, while Nifty FMCG strengthened 1%. The rise in FMCG stocks was due to the hopes related to the GST council meeting to be held on September 3-4.
Foreign investors in the cash market were net seller on Friday. However, domestic institutional investors gave some support as net buyers.
How will the Nifty move ahead
Now the market is eyeing Prime Minister Narendra Modi’s visit to China, where he is going to attend the SCO Summit for the first time after seven years. This four -day visit also covered Japan, where India focused on strengthening business relations.
The US economy has shown strength in the second quarter. GDP growth has been estimated from 3.0% to 3.3%, the credit is being given to strong consumer expenses and low imports.
Analysts believe that Indian equity may remain in a limited scope currently. The next week will have an impact of Indo-US trade talks and the Prime Minister’s meeting with global leaders. The market on Monday will also react to India’s second quarter GDP and US retail inflation data.
Expert opinion on Nifty
The process of decline in the Nifty continues and the short-term trend still remains weak. Analysts believe that the index is close to important support levels and from here a decisive move will determine the next direction.
Nagraj Shetty of HDFC Securities says that the Nifty is close to the critical support of 24,300–24,200. If this level breaks, the index can slip up to 24,000–23,900. At the same time, closing trends above 24,700 upwards can bend in favor of bulls.
‘Sell on Rise’ strategy better
LPK Securities’s metaphor Dey says that the Nifty has slipped under 100-ma, which confirms the deep bearish trend. According to him, weakness may continue and the index can go close to 200-DMA (24,071). The support is at 24,400 and 24,150, while the resistance is visible at 24,650. Day says that it would be better to adopt the “Sell on Rise” strategy until the Nifty goes above 24,850.
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Short covering signs missing
Osho Krishnan of Angel One said that the Nifty remains around 24,350. If this level breaks, the fall may increase to 24,150–24,100 (200-DSMA). Nandish Shah of HDFC Securities said that the Nifty is moving towards its previous swing 24,337 and 200-ma (24,267) support. At the same time, resistance levels have now shifted to 24,572 and 24,700.
Nilesh Jain of Centerum Broking says that despite the oversold condition, there are no signs of short covering. Weakness may remain, with 24,070 (200-DMA) main support and 24,700 (100-DMA) important resistance.
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