Enduring bouts of volatility on the August F&O expiry day, market benchmarks ended in the green for the fifth consecutive session on August 27, supported by gains in select heavyweights such as HDFC, Axis Bank, Mahindra & Mahindra, SBI, ICICI Bank and IndusInd Bank.
The Sensex closed 40 points, or 0.10 percent, up at 39,113.47 and Nifty settled 10 points, or 0.08 percent, up at 11,559.25. The BSE midcap index closed flat while the smallcap index ended 0.35 percent higher.
Among the sectoral indices, BSE energy fell over a percent. Oil & gas, utilities, telecom, FMCG also ended in the red. On the other hand, BSE realty surged 6.63 percent.
Tracking muted global cues, markets failed to hold on to gains and closed flat, but with a positive bias. The market was also nervous ahead of the Jackson Hole meeting.
The advance-decline ratio was almost equal, suggesting caution and mild profit-taking.
"Markets could stabilise and take a pause for the next one or two sessions before resuming the upmove. The outcome of the US Fed Chair’s address tonight in the US will have a bearing on global markets and may impact markets in India on August 28," said Deepak Jasani, Head of Retail Research, HDFC Securities.
Also Read: Gainers & Losers: 10 stocks that moved the most on August 27
We have collated views of experts on what investors should do on August 28 when the market resumes trading:
Aamar Deo Singh, Head Advisory, Angel Broking
Markets ended flat on August 27, which also was the last day of the August F&O series. Lackluster trading was witnessed throughout the day, with the Nifty50 unable to hold initial gains.
Shorts have been squeezed hard in this expiry and with Nifty closing above the psychological mark of 11,500, the bears are likely to remain cautious.
The Nifty will meet stiff resistance at around the 11,600-11,650 zone, whereas support is seen around 11,250-11,350.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
A small negative candle was formed with minor lower shadow, which signals range-bound action in the market at the highs.
The smaller degrees of higher highs and lows continued on the daily chart and the Nifty is now placed near the higher high of the sequence. But, still there is no indication of any reversal pattern forming at the highs.
Though the Nifty showed an upside breakout of the significant overhead resistance of uptrend line (connected from the important bottom reversals) at 11,450-11,500 as per weekly timeframe chart, the internal strength of the market during this upside breakout was subdued.
The lack of strength could more often result in a false upside breakout of the hurdle. Hence, one needs to be careful about any reversal signal at the highs.
The short-term trend of the Nifty continues to be choppy with positive bias. A similar type of movement is likely to continue in the coming sessions. One needs to be cautious about the longs, as there is a possibility of a sharp trigger of downward correction from the highs. Immediate supports to be watched at 11,450. The next resistance is placed at 11,620-650 levels.
Ajit Mishra, VP - Research, Religare Broking
Markets ended marginally higher on the F&O expiry day amid volatility. Initially, firm global cues led to an upbeat start but profit-taking trimmed the gains.
We suggest booking some profit as the benchmark may see a pause after testing the immediate hurdle at 11,600.
However, the bias will remain on the positive side, thanks to the upbeat banking pack and support of index majors as well. We reiterate our view to focus on the selection of stocks and overnight risk management.
Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited
The Nifty settled the expiry day with the marginal gains but continued its winning streak for the fifth consecutive session and knocked the 11,600 level.
It formed a small-bodied bearish candle on a daily scale as it closed lower than its opening levels but continued its formation of higher highs - higher lows for the fifth consecutive session.
The major trend of the index is positive and buying interest on declines could support it to commence the next leg of the rally.
Now, it has to continue to hold above 11,450 zones to witness an up move towards 11,750 zones while on the downside medium-term support shifts to 11,400-11,350 zone.
India VIX fell by 2.16 percent at 18.89 levels. Volatility is gradually cooling down, which suggests a bullish stance and buy on decline strategy could continue in the market.
Since it is the beginning of the September series, so options data is scattered at various strikes. Maximum Put OI is at 11,000 followed by 11,500 strike, while maximum Call OI is at 12,000 followed by 11,500 strike.
We have seen marginal Call writing in 11,600 and 11,800 strike while Put writing is seen at 11,600 then 11,500 strike. Options data suggests a positional wider trading range in between 11,200 to 11,800 zones.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.