F&O Talk | Nifty ends Augustus lower in the midst of global headwinds; Main support now at 24,250: Sudeep Shah

Markets ended the holiday -loving week in the red because the sentiment was moistened by concern about the impact of American rates on Indian exports that came into effect during the week. The risk shade remained soft at the weekend, so that the headline indices were kept under pressure and knew a large part of the profit of last week.

Rate -related uncertainty dominated market sentiment, limit risk appetite and otherwise overshadows access -related trade in a truncated week. However, the confirmation of Fitch from the sovereign rating of India with a stable prospect, in addition to the growth of industrial production (IIP), accelerates to a highlight of four months, helped to limit the pace of the decline in midweek.

The BSE Sensex fell 270.92 points, or 0.34%, to end at 79,809.65, while the NSE Nifty 74.05 points, or 0.30%, decreased to settle on 24,426.85.

With this, analyst Sudeep ShahVice -president and head of technical and derivatives research SBI effectsInteraction with ET markets with regard to the prospects for Nifty and Bank Nifty, as well as an index strategy for the coming week. The following are the edited fragments from his chat:

Nifty wiped all the profit from the past week. Shall we probably enter a bear market?

In August Nifty traded within a narrow range of 816 points – the lowest monthly reach since March 2024 – despite raised volatility. The index reflected a tug of war between supporting domestic signals and worldwide headwind. Sentiment improved halfway through the month after S&P had upgraded India’s prospects and announced PM Modi GST reforms.

However, this optimism was short -lived. In the last stage of the month, the Nifty turned around sharply and lost more than 700 points in just six trade sessions. The decline was largely caused by escalating tariff tensions between us and India.

Finally, Nifty settled near the 24400 marking and placed a monthly decrease of 1.38%. This meant the second consecutive month of negative returns, the underline of persistent sales pressure and the absence of by continuing. Technically, the index now acts under its 20-day, 50-day and 100-day EMAs-Die all trending, which signals weakening short to medium term. The day -to -day RSI slid under 40 Mark and this is located in a falling mode, which is a bearish board.

Continue, the 200-day EMA zone of 24300-24250 has emerged as the most important make-or-break level for Nifty. A continuing break below 24250 can accelerate the disadvantage, so that the index may be dragged to 24000. The resistance zone of 24650–24700 will be crucial on the advantage; Only a decisive movement above this band can breathe new life into Bullish sentiment and release the road for a recovery.

The decrease in the banking sector and the bank index is sharp. What do you think about this? What is the prospects?

Bank Nifty experienced a sharp decrease in August, in which almost 4% was dropped and a prominent bearish candle was on the monthly graph. This decline will follow in July the rise of a candlestick pattern of a dark wool commercial, which has now been validated by the correction of Augustus, which strengthens the bearish sentiment on a broader period of time.

The index has consistently printed the front line indices in recent weeks. This relative weakness is clearly in the Nifty versus Nifty Ratio Chart, which has been slipped to a low of 100 days-what is indicating. After registering a Swing High of 56156 recently, the index has been strongly corrected with more than 2400 points within only nine trade sessions, which emphasizes the intensity of the decline.

With this correction it has slipped under his EMA levels of 20, 50 and 100 days. These averages are started lower, which is a bearish board. The daily RSI is in Bearish and is in a falling mode. The daily MacD remains Beararish as it quotes under his zero and signal line.

Continue, the 200-day EMA zone of 53600-53500 will act as immediate support for the index. Each sustainable movement below the 53500 level will lead to further correction to the 52900, followed by 52400 in the short term. While the benefit of the 54500-54600 zone will act as an important obstacle for the index.

Let’s talk about Rollovers. What suggest the data?

The handy futures ended the series with a marginal decrease of 0.88%, which reflects the balance between early optimism and headwind in the late month. In the field of derivatives, the Rollover from Nifty Futures rose in August to 83.63%, not only higher than the 75.71%of July, but also comfortable above the average of three months of 79.62%. In the meantime, the rollover costs were higher up to 0.63%, with the average of three months of 0.43%, suggesting that participants were willing to pay a premium to transfer their positions in the September series.

Bank Nifty Futures performed considerably behind the frontlinian indices. The index ended the August series with a steep loss of 3.44%, weighed by persistent weakness in heavyweight bank shares. From the perspective of a derivatives, the rollover jumped to 80.90%, an increase in the 77.98%of July and also above the average of three months of 78.21%. The rollover costs rose to 0.83%, higher than the average of three months of 0.42%.

Which sectors look good based on Rollover data?

Potential better-performing sectors based on roll-over data: car, consumers sustainable and FMCG.

Potential underperforming sectors based on Roll-Over data: private banks, financial services, defense, oil and gas, media, PSE, CPSE, capital market and realty

Based on this, do you add shares to your tracking list?

Yes, we follow opportunities accurately in the Automobile, FMCG and consumers sectors. These segments show promising signs, especially in the light of recent policy developments and the improvement of domestic sentiment.

Let’s talk about our market remover, Ril. What is your opinion after the AVA and how do you read the stock technically?

Reliance Industries, an important index heavyweight, witnessed a breakdown of a 26-day consolidation phase on the day of his AGM. This breakdown was accompanied by strong volumes, giving credibility to the move. Moreover, the stock formed a bearish candle with a long upper shade, which indicates sales pressure at higher levels. It is important that it has also violated its crucial 200-day EMA, so that his technical structure is further weakened. Momentum -indicators are joining this Bearish arrangement, which suggests that the potential for constant disadvantage.

That is why we believe that it will probably continue its southern journey and test the level of 1290 in the short term. While he is at the front, the 200-day EMA zone of 1390-1400 will act as an immediate obstacle for the stock.

Since the announcement of the GST Rate Cut, the FMCG package is doing very well. How can one benefit from the theme and what shares to choose?

Since the announcement of the GST rate, the FMCG sector has seen a renewed investor interest rate, with different shares that show a strong momentum. The wider Nifty FMCG index has, however, traded the last 38 trade sessions within a horizontal channel, indicating a phase of consolidation. This narrow range has led to a flattening of advancing averages, and the daily RSI remains in a sideways zone, consistent with RSI -range range principles. Despite the stagnation at index level, selected FMCG shares started to show bullish trends, which suggests that stock-specific action will probably dominate in the short term. Investors who want to benefit from this theme must focus on individual outperformers instead of the entire package.

Unlike this, are there sectors on which you concentrate?

Technically, car, sustainable consumers and FMCG will probably perform better in the short term.

While Nifty Private Bank, CPSE, PSE, Defense, Financial Services, Oil and Gas, Capital Market, IT, Media, PSU Bank and Realty will probably continue their underperformance in the short term.

All shares that you find well placed in those sectors?

Technically, Britannia, CGPower, Dalbharat, Sylma, Luaxtech, Cartrade, Jamnaauto and Avantel look good.

((Indemnification: Recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)