Trade Setup For Sept. 17: Nifty Has Key Support Levels At 25,350–25,300
An expected rate cut by the US Federal Reserve this week is likely to have a substantial impact on the global markets.
With the S&P BSE Sensex closing at a record high, and the NSE Nifty 50 also logging gains on Monday, analysts are of the view that the market is largely bullish, but some range-bound action could be seen in the near future.
For traders, the key support zones will be 25,350–25,300 for the Nifty and 82,900–82,700 for the Sensex, according to Shrikant Chouhan, head of equity research at Kotak Securities Ltd. The key resistance areas are seen at 25,500–25,575 and 83,300–83,600 for the two benchmark indices, respectively.
"However, below 25,300 and 82,700, the sentiment could change as traders may prefer to exit out from the trading long positions," he added.
"The larger texture of the market is bullish, but we could see a range bound activity in the near future," Chouhan said.
The 21-double exponential moving average support for Nifty is currently placed near 25,020. As long as Nifty stays above 25,000, a buy-on-dips strategy is advisable, with the potential for the index to test 25,600 in the short term, said Hrishikesh Yedve, assistant vice president of technical and derivatives research at Asit C Mehta Investment Interrmediates Ltd.
Bank Nifty, which started the day on a strong note and managed to close higher at 52,153, "could test levels of 52,800–53,000, with a medium-term target of 53,800", Yedve added.
The Nifty appears to be forming a bullish pennant and pole formation where a strong move above 25,430 will be considered as a breakout point. In case of a breakout, the approximate target comes at 25,770, according to Aditya Gaggar, director of Progressive Share Brokers.
Going forward, an expected rate cut by the US Federal Reserve this week is likely to have a substantial impact on the global markets. "Hence, it is advisable to maintain a cautiously optimistic outlook and implement effective risk management strategies," said Osho Krishan, senior analyst of the technical and derivatives at Angel One Ltd.
F&O Action
The Nifty September futures were up 0.25% to 25,442 at a premium of 59 points, with open interest down by 2.9%.
The Nifty Bank September futures advanced by 0.64% to 52,261 at a premium of 108 points, while its open interest was down by 4.29%.
The open interest distribution for the Nifty 50 Sept. 19 expiry series indicated most activity at 26,000 call strikes, with 25,000 put strikes having maximum open interest.
For the Bank Nifty options expiry on Sept. 18, the maximum call open interest was at 53,000 and the maximum put open interest was at 50,000.
FII-DII Activity
Overseas investors turned net sellers of Indian equities on Monday after five consecutive sessions of buying. Foreign portfolio investors offloaded stocks worth approximately Rs 1,635 crore, according to provisional data from the National Stock Exchange.
Domestic institutional investors stayed net buyers for the second consecutive session and purchased equities worth Rs 754.1 crore, the NSE data showed.
Market Recap
The S&P BSE Sensex ended Monday's session at a record high, while the NSE Nifty 50 also closed higher, buoyed by gains in ICICI Bank Ltd. and Larsen & Toubro Ltd. Both the benchmark stock indices traded at fresh opening highs, before paring gains through midday.
The Nifty closed 27.25 points or 0.11%, higher at 25,383.75 and Sensex settled 97.84 points or 0.12%, higher at 82,988.78. Intraday, the Nifty and Sensex advanced as much as 0.35% each to 25,445.70 and 82,184.34, respectively.
The market breadth was skewed in favour of the buyers as 2,185 stocks rose, 1,927 declined and 89 remained unchanged on the BSE.
Major Stocks In News
TVS Motor: The company launched the All New Apache RR 310 at starting price of Rs 2.75 lakh, ex-showroom.
FirstSource Solutions: The company partnered with Microsoft for digital services.
Globus Spirits: The company launched its first single malt whisky under brand DŌAAB India Craft Whisky.
Torrent Power: The company entered an MoU with the government of Gujarat for execution of 5 GW solar, wind or solar-wind hybrid project in the state's Dwarka.
Tarmat: The company, in an 80:20 JV, received Rs 139-crore order from Maharashtra Infrastructure Development Corp.
Panacea Biotech: The company has reached a settlement agreement with Sanofi India in case of marketing dispute over alleged patent infringement. Sanofi agreed to not commercially launch the disputed vaccine in India.
Carborundum Universal: The company said it will acquire the US-based Silicon Carbide Products for Rs 56 crore.
Reliance Infra: The company will consider fundraise on Sept. 19.
JK Tyre: The company approved the plan to merge Cavendish Industries with it.
Indo Count Industries: The company's unit bought 81% stake in the US-based Fluvitex for $19.6 million. It also has an exclusive option to buy balance 19% for $4.6 million in the next five years.
Monarch Networth: The company appointed Govinda Meghani as CFO with effect from Monday.
Sandur Manganese: The company approved raising up to Rs 1,000 crore via QIP.
HEG: Gulshan Sakhuja resigned as CFO with effect from Monday.
Allcargo Terminals: The company's volumes in August 2024 were 53.6’000 TEUs depicting a marginal decline of 1% over last month as well as previous year.
Global Cues
Asian stocks were mixed in early trade ahead of the crucial rate decision by the US Federal Reserve with traders increasingly pricing in a half-point cut.
The equity benchmark in Japan fell while that of Australia was slightly higher. S&P ASX 200 was up 0.27% at 8,143 while Nikkei was down 0.49% at 36,393 as of 6:00 a.m. Markets in China and South Korea will remain shut for public holidays.
The US central bank will begin its two-day meeting starting Wednesday while traders and economists remain captivated by how much the Fed will pivot.
Fed funds futures traders on Tuesday priced in a 62% probability of a 50 basis-point cut, up from 47% last Friday. They saw a 38% probability of a 25 basis-point cut, according to the CME FedWatch Tool.
While the S&P 500 edged only mildly higher, the Dow Jones Industrial Average closed at a fresh record. Wall Street's technology stocks were mixed with Apple Inc., Nvidia Corp. and Tesla Inc. weighing the tech-heavy Nasdaq index.
The S&P 500 and Dow Jones Industrial Average rose 0.13% and 0.55%, respectively. The Nasdaq Composite declined by 0.52%.
Brent crude was trading 0.23% higher at $72.92 a barrel as of 5:57 a.m. IST. West Texas Intermediate was up 0.51% at 70.45.
Key Levels
U.S. Dollar Index at 100.68
U.S. 10-year bond yield at 3.62%
Brent crude up 0.19% at $72.89 per barrel
Bitcoin was up 0.71% at $58,080.68
Gold spot was flat at $2,582.44.
Money Market
The Indian rupee strengthened against US dollar on Monday as traders await the outcome of the Federal Open Market Committee's decision on interest rates this week.
The local currency appreciated two paise to close at Rs 83.88 against the US dollar, according to Bloomberg. It had closed at Rs 83.90 on Friday.
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