A new month and a new series - everything is new for the Nifty 50. But the trend? Will that be new as well? Or will the last two weeks of August continue to cast a shadow on the Nifty 50's performance in September as well? We have the next 30 days to find an answer to that.
No amount of MSCI inflows were able to rescue the Nifty 50 from tumbling down towards their support level of 19,250, where it eventually closed on the August F&O expiry. It turned out to be the first negative F&O series since March and the first negative month as well.
For the week, the Nifty 50 is down 12 points. In case it closes below 19,265 in today's session, it will be the sixth straight weekly loss for the index, which will turn out to be the longest weekly losing streak since February-March, 2020. During that period, the Nifty 50 fell seven weeks in a row.
Today's session will have the Nifty 50 react to a slew of economic data. Auto companies will start to report their monthly sales figures, India's GDP grew at 7.8 percent for the June quarter, while the manufacturing PMI data for August will also be reported today.
For traders, 19,220 will act as a sacrosanct support zone and if the Nifty 50 falls below that, the selling pressure may accelerate towards 19,150 - 19,125, said Shrikant Chouhan of Kotak Securities. The index has formed a bearish candle on the daily charts, which is negative. Sustaining above 19,220 can take the index back towards 19,320 - 19,380, he added.
Rupak De of LKP Securities said that the overall sentiment remains pessimistic with any rally being sold into. The initial support for the index is now at 19,200 and below that, the Nifty 50 can fall towards levels of 19,000. The sell-on-rise strategy will be negated only if the Nifty closes above 19,500.
The MSCI flows managed to lead a 100-point recovery in the Nifty Bank from the day's low but that was not enough to prevent a close below the mark of 44,000 for the index. The banking index fell nearly 1,700 points in the August series. Majority of the underperformance is coming from the heavyweights, HDFC Bank and ICICI Bank, both of which were among the top losers in the August series.
In case the Nifty Bank fails to hold the 44,000 mark, the additional selling pressure may push it down towards the mark of 43,000, said Kunal Shah of LKP Securities. Immediate obstacle on the upside is at 44,200, a break above which can take the index back towards 45,000.
Ashwin Ramani of SAMCO Securities said that the Nifty Bank recovered from its 100-DMA at 43,920 and its key downside support lies at 43,800. A break below that an take the index another 500 points lower.
Shares of Gokaldas Exports finally witnessed some profit booking on Thursday after surging nearly 40 percent in two sessions. The stock surged to a record high after its latest acquisition, which the street viewed positively. After a surge of 20 percent and 16 percent respectively over Tuesday and Wednesday, the stock ended 10 percent lower on Thursday.
"I wouldn't recommend selling them because these are great long term stories - buying into them itself requires a lot of research and conviction, which is now there in place," said Dipan Mehta of Elixir Equities. "But from a fresh investing perspective, I think it's better to just wait and watch, have that compression of P/E multiple of even three, four times or so and that will provide some amount of margin of safety," he added.
What are the F&O Cues Indicating?
Nifty 50's September futures added 35 percent or 26 lakh shares in Open Interest on Thursday. They are currently trading at a premium of 160 points. On the other hand, Nifty Bank's September futures added 96 percent or 11.61 lakh shares in Open Interest. Nifty 50's Put-Call Ratio is now at 1.19 from 0.91.
BHEL and Indiabulls Housing Finance are both out of the F&O ban and no stocks are currently in that list at the start of the series.
Nifty 50 on the Call side for September 7 Expiry:
For next Thursday's expiry, the Nifty 50 call strikes between 19,400 and 19,800 have seen significant Open Interest addition. Incidentally, the 19,800 strike call has seen the maximum addition in Open Interest.
| Strike | OI Change | Premium |
| 19,800 | 27.6 Lakh Added | 3.55 |
| 19,600 | 26.67 Lakh Added | 18.65 |
| 19,700 | 24.93 Lakh Added | 8.05 |
| 19,400 | 22.79 Lakh Added | 80.75 |
Nifty 50 on the Put side for September 7 Expiry:
On the downside, the Nifty 50 put strikes between 18,500 and 19,200 have seen Open Interest addition. In a unusual observation, the 18,000 strike put has seen the maximum Open Interest addition for next Thursday's expiry.
| Strike | OI Change | Premium |
| 18,000 | 34.6 Lakh Added | 1.95 |
| 19,200 | 26.4 Lakh Added | 50.8 |
| 18,500 | 23.5 Lakh Added | 2.55 |
| 18,900 | 20.2 Lakh Added | 11.75 |
Lets take a look at the stocks that added fresh long positions on Monday, meaning an increase in price and Open Interest:
| Stock | Price Change | OI Change |
| Manappuram Finance | 3.86% | 1043.00% |
| Hindustan Copper | 2.51% | 623.40% |
| GMR Infra | 2.70% | 101.50% |
| Sun TV | 0.88% | 82.00% |
| Oberoi Realty | 0.13% | 59.34% |
Lets take a look at the stocks that added fresh short positions on Monday, meaning a decrease in price but increase in Open Interest:
| Stock | Price Change | OI Change |
| Astral | -2.38% | 117.75% |
| HDFC AMC | -2.99% | 81.44% |
| Escorts | -1.90% | 80.91% |
| Cummins India | -1.23% | 74.70% |
| Torrent Pharma | -5.54% | 65.00% |
Lets take a look at the stocks to watch out for ahead of today's session:
What Are Global Cues Indicating?
Asian markets have opened mostly lower amidst the China manufacturing PMI data and a host of other economic data emerging from the region.
The Nikkei 225 has opened 0.2 percent lower, while the Kospi in South Korea is down 0.1 percent.
Hong Kong is bracing for a Super Typhoon Saola and the Hang Seng index will pause trading due to the same.
Overnight, US markets had a pullback after some days of gains. The Dow fell over 150 points, while the S&P 500 fell nearly 0.2 percent. The Nasdaq, though ending higher for the day, had its worst month of 2023.
Foreign investors were net sellers in the cash market on Thursday, while domestic institutions continued to buy. The numbers will be influenced by block deals in MedPlus Health and Sula Vineyards.
Nagaraj Shetti of Nifty 50 believes that the Nifty 50 may form a lower bottom sequence at the levels of 19,229 in the short-term, but the underlying trend remains choppy with a weak bias. He expects further weakness below levels of 19,200 towards 19,000 - 18,900, where there is a strong support, which may result in a bounce.
"The Nifty 50 index has confirmed the first part of the breakdown and the second part will be confirmed once it falls below 19,200," said Mehul Kothari of Anand Rathi. If that happens, Kothari said that the index can retest its 200-DMA close to 18,600. The bearish view is negated above 19,450.
First Published: Sept 1, 2023 5:19 AM IST
Trade Setup for September 1: Nifty 50 may fall another 100-200 points if it slips below this level - CNBCTV18
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