Trade Setup For Aug. 27: Nifty's Path To 25,300 Hinges On Breaching 25,080 Resistance

Market action is expected to hinge on whether the Nifty can decisively break above the key resistance level of 25,080, which could pave the way for a rise towards 25,300 or even 26,270, according to analysts.

"The Nifty remained strong throughout the day. However, failure to move above 25,080 might trigger selling in the market, potentially bringing the index back towards 24,800," said Rupak De, senior technical analyst at LKP Securities.

Traders are advised to remain cautious, with a focus on stock selection, as sentiment is buoyed by favourable global cues and expectations of interest rate cuts, according to Ajit Mishra, senior vice president of research at Religare Broking Ltd. He also recommends a "buy on dips" strategy, particularly as large-cap valuations remain attractive, but warns that the banking sector's mixed performance could limit upward momentum.

"With a strong bullish candle, the index has filled its bearish gap zone, indicating a strong presence of bulls. The immediate hurdle is placed at the previous high of 25,078, while the downside seems to be protected at 24,870," said Aditya Gaggar, director of Progressive Shares. A strong close above 25,078 will be considered a breakout from a V-shaped pattern, and in that case, the approximate target comes to 26,270, he said.

The GIFT Nifty, an early indicator of the Nifty 50 Index’s performance in India, was down 21 points or 0.08% at 25,015.5 as of 6:47 a.m.

The Nifty August futures were up 0.77% to 25,043 at a premium of 33 points, with open interest down by 10.8%.

The Nifty Bank August futures were up by 0.5% to 51,219 at a premium of 71 points, while its open interest was down by 8.7%.

The open interest distribution for the Nifty 50 Aug. 22 expiry series indicated most activity at 26,000 call strikes, with 24,000 put strikes having maximum open interest.

For the Bank Nifty options expiry on Aug. 28, the maximum call open interest was at 52,000 and the maximum put open interest was at 51,000.

Overseas investors stayed net buyers of Indian equities on Monday for the third consecutive session.

Foreign portfolio investors bought stocks worth Rs 483.4 crore, domestic institutional investors stayed net buyers for the 16th session and bought equities worth Rs 1,870.2 crore, the NSE data showed.

The NSE Nifty 50 logged its longest winning streak in more than a year to end above the psychologically crucial 25,000 mark on Monday after 16 sessions and the S&P BSE Sensex extended its gains for the fifth consecutive session.

The rally came after dovish commentary by US Fed Chair Jerome Powell at the Jackson Hole symposium, which confirmed a September rate cut in the US.

The Nifty closed 187.45 points or 0.76%, higher at 25,010.60 and the Sensex was 611.90 points or 0.75%, up at 81,698.11. Both indices closed at their highest levels since Aug. 1.

The Nifty ended higher for the eighth consecutive session, its best streak since the eight sessions that ended on July 6.

• GPT Infraprojects: The company launched qualified institutional placement and set the floor price at Rs 183.83 per share.

• HCL Tech: The company extended the agreement with Xerox to for AI-based innovation and digital engineering solutions.

• Jai Corp: The company received intimation of merger of promoter Pet Fibres with Mega Pipes.

• Lemon Tree Hotels: The company signed a license pact for an 80-room hotel in Ayodhya.

• Mazagon Dock Shipbuilders: The company extended the term of Sanjeev Singhal as Chairman and Managing Director for five more months effective Aug. 1.

• Medi Assist Healthcare Services: The company's arm is to enter into a share purchase agreement to buy Paramount TPA for Rs 312 crore.

• PI Industries: The company appointed Sanjay Agarwal, as Group CFO effective Aug. 26, after Manikantan Viswanathan attained the age of superannuation.

• Piramal Enterprises: The company unit Piramal Capital & Housing finance held liable for Rs 466 crore penalty on voluntary withdrawn claim of Rs 3,698 crore from Dewan Housing Finance merger.

• UltraTech Cement: The company raised $500 million through a sustainability-linked loan with participation from six banks.

• Zydus Life: The company clarified that today’s stock movement is not attributable to previously announced acquisition of 50% stake in Sterling Biotech, US Food and Drug Administration approval for generic of mesalamine has been given to another company, which could impact sales.

Asian stocks were cautious on Tuesday taking mixed cues from Wall Street as traders weighed the magnitude of the September rate cut by the US Federal Reserve.

The Japanese and South Korean benchmarks traded lower while Australia's was marginally higher. The Nikkei 225 was 0.12% lower at 38,065, and the S&P ASX 200 was 0.05% higher at 8,088 as of 6:32 a.m.

The wary stance also comes as China's economy will take another hit with Canada proposing to impose new tariffs on South Asian-made electric vehicles, aluminum and steel. A 100% levy on electric cars and 25% on steel and aluminum will be charged against China.

China's industrial profits, Germany's GDP print and US Conference Board consumer confidence will be the key announcements market participants will eye during the day.

Most benchmarks in the US ended lower on Monday as technology companies weighed on the market. A gauge of the 'Magnificent Seven' megacaps slid 1.2%, according to Bloomberg.

The S&P 500 and Nasdaq Composite declined 0.32% and 0.85%, respectively. The Dow Jones Industrial Average climbed 0.16%. US stocks lost steam near record highs a day after Jerome Powell cemented September rate cuts but left traders debating on the magnitude.

Brent crude was trading 0.27% lower at $81.21 a barrel as of 06:41 a.m. Gold fell 0.17% to $2,513.80 an ounce.

• US Dollar Index at 100.87.

• US 10-year bond yield at 3.81%.

• Brent crude down 0.27% at $81.21 per barrel.

• Bitcoin was down 0.72% at $62,992.53.

• Gold was fell 0.17% at $2,513.80.

The Indian rupee closed flat against the US dollar on Monday, paring morning gains, as month-end dollar demand from importers offset the impact of easing greenbacks following Powell's address on Friday, which bolstered expectations for an interest rate cut at the September meeting.

The local currency closed flat at Rs 83.90 after having opened at Rs 83.82, according to Bloomberg data. It had closed at 83.90 on Friday.