Trade setup for Thursday, 25th August 2022: Key things to know before stock market’s Opening Bell today

Trade setup for Thursday: Despite weakness in European and some Asian markets due to buzz about US Fed interest rate hike, Indian stock market ended in positive zone on second straight session on Wednesday. NSE Nifty finished 27 points higher at 17,604, BSE Sensex surged 54 points and closed at 59,085 whereas Nifty Bank index ended 340 points north at 39,038 levels. Mid-cap and small-cap stocks outperformed key benchmark indices with both the Nifty mid-cap 100 and small-cap 100 gaining more than half a per cent.

Global markets cues

On Wall Street, all major indices ended in green territory after trading flat on Wednesday session. Dow Jones finished 0.18 per cent higher, tech heavy Nasdaq surged 0.41 per cent, S&P 500 gained 0.29 per cent whereas Small Cap 2000 shot up 0.94 per cent. European and some Asian markets were under pressure due to the latest hawkish noises from the Federal Reserve amid mounting signs of a global economic slowdown.

Asian markets’ early morning trends

In early morning deals on Thursday, the Japanese Nikkei is up 0.50 per cent, Hong Kong’s Hang Seng is down by 1.20 per cent whereas Chinese Shanghai is trading flat around Wednesday’s close.

SGX Nifty technical outlook

SGX Nifty is quoting 58 points higher at 17,674 levels in early morning session on Thursday that drops a hint that Indian market may have a positive to sideways opening.

Speaking on important levels in regard to SGX Nifty today, Anuj Gupta, Vice President — Research at IIFL Securities said, “Overall trend is sideways to up. Small range of SGX Nifty today lies in between 17,550 to 17,800 whereas broader range of SGX Nifty today is 17,400 to 18,000.”

Nifty technical outlook

Speaking on Nifty outlook, Rajesh Palviya, VP – Technical & Derivative Research at Axis Securities said, “On the daily chart, the index has formed a bullish candle. However, it remained restricted within the previous session’s High-Low range, indicating the absence of strength on either side. The index is moving in a Higher Top and Higher Bottom formation on the daily chart, indicating an uptrend. The chart pattern suggests that if the Nifty crosses and sustains above the 17700 level, it would witness buying, which would lead the index towards 17800-17900 levels. However, if the index breaks below the 17500 level, it would witness selling, which would take the index towards 17400-17300.”

Rajesh Palviya of Axis Securities went on to add that Nifty is trading above its 20, 50, 100, and 200-day SMA which indicates positive bias in the short term. Nifty continues to remain in an uptrend for the short term, so buying on dips continues to be our preferred strategy. The daily strength indicator RSI has turned negative from the overbought territory and is below its reference line, indicating profit booking.

Nifty Bank technical outlook

On how Nifty Bank index stands on daily chart pattern, Rajesh Palviya said, “On the daily chart, the index has formed a bullish candle and has closed above its previous session’s high representing a positive bias ahead. The index is moving in a Higher Top and Higher Bottom formation on the daily chart indicating a short-term up trend. The chart pattern suggests that if Bank Nifty crosses and sustains above the 39200 level it would witness buying which would lead the index towards 39500-39800 levels. However, if the index breaks below the 38800 level it would witness selling which would take the index towards 38600-38300.” 

Palviya said that Nifty Bank is trading above 20, 50, 100, and 200-day SMA indicating positive bias in the short to medium term. Bank Nifty continues to remain in an uptrend in the short term, so buying on dips continues to be our preferred strategy. The daily and weekly strength indicator RSI is moving downwards and is quoting below its reference line, indicating negative bias.

Nifty Call Option data

As per data shown by nseindia.com at 3.30 pm on 24 August, major total Call open interest was seen at 17700, 17800 and 17900 strikes with total open interest of 153443, 177309 and 137350 contracts respectively. Major Call open interest addition was seen at 17700 and 17800 strikes which added 44629 and 42690 contracts respectively. Call unwinding was seen at 17400 and 17500 strikes which shed 12470 and 9286 contracts respectively.

Nifty Put Option data

Major total Put open interest was seen at 17400, 17500 and 17600 strikes with total open interest of 129339, 180979 and 135885 contracts respectively. Major Put open interest addition was seen at 17500 and 17600 strikes which added 24982 and 40641 contracts respectively. Put unwinding was seen at 17800 strike which shed 6799 contracts.

Nifty Bank Call Option data

Major total Call open interest was seen at 39200, 39300 and 39500 strikes with total open interest of 68417, 51573 and 100898 contracts respectively. Major Call open interest addition was seen at 39200 and 39300 strikes which added 21888 and 9269 contracts respectively. Call unwinding was seen at 38700 and 38800 strikes which shed 12255 and 10692 contracts respectively.

Nifty Bank Put Option data

Major total Put open interest was seen at 38700, 38800 and 39000 strikes with total open interest of 57319, 55160 and 81225 contracts respectively. Major Put open interest addition was seen at 38900 and 39000 strikes which added 40220 and 51444 contracts respectively. Put unwinding was seen at 39500 strike which shed 2736 contracts.

FII DII data

Foreign institutional investors (FIIs) have net bought ₹23.19 crore worth of shares, whereas domestic institutional investors (DIIs) have net sold ₹322.34 crore worth of shares on August 24, as per provisional data available on the NSE.

NSE F&O ban list

The National Stock Exchange (NSE) has added RBL Bank stock under its F&O ban list for trade date 25th August 2022. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 per cent of the market-wide position limit.

US bond yield

US 10 year bond yield is up by 0.11 per cent to 3.109 whereas US 30 year bond yield is down by 0.03 per cent to 3.319.

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