Taking Stock: Another day of highs for Sensex, Nifty; IT, FMCG power gains

On the sectoral front, buying was seen in stocks like IT, healthcare, consumer durable, and power stocks. Metal and telecom saw selling.

Domestic indices swung between gains and losses in a volatile session amid weakened global markets. “Due to concerns over the rising global infection rate and tighter government regulations for the Chinese internet sector, global markets continued to fan investor worries,” Vinod Nair, Head of Research at Geojit Financial Services, said.

However, backed by solid support from defensive sectors like IT, FMCG and pharma, frontline indices gained ground to end the day flat, he said.

More than 200 stocks, including Apollo Hospitals, Tata Elxsi, Max Healthcare, Zensar Technologies and Sonata Software, hit a fresh 52-week high on the BSE.

India VIX fell 0.35 percent from 13.45 to 13.41 levels. Overall, comparative lower volatility indicates that bulls are in charge and momentum is likely to continue.

On the options front, the maximum Put OI is placed at 16,500 followed by 16500 strikes, while maximum Call OI is seen at 16,500 followed by 17,000 strikes.

The data suggests a broader trading range of 16,300-17,000 for the Nifty. The immediate range is between 16,400 and 16,750 zones, experts have said.

Here’s what experts suggest investors should do on August 18:

Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services

The Nifty made another lifetime high of 16,628 and closed the day near its highest levels, gaining around 50 points.

It formed a bullish candle on the daily scale and formed higher highs-higher lows for the fourth session in a row, with declines being bought smartly.

The index has to continue to hold above 16,500 to extend the momentum towards 16,750 and 17,000. On the downside, support shifts higher to 16,400 and 16,300.

Gaurav Ratnaparkhi, Head, Technical Research, Sharekhan by BNP Paribas

The Nifty opened on a negative note and witnessed consolidation in the first half of the session. In the second half, however, the index attracted a fresh round of buying that put the index back on an upward trajectory.

The hourly chart shows that the Nifty found support near the 20-hour moving average and took a leap towards the hourly upper Bollinger Band. The daily upper Bollinger Band continues to stretch higher, which is making room for the index on the upside.

The Nifty has crossed 16,600 on a closing basis and is on the course to 16,800.

On the other hand, 16,500-16,450 has been providing a cushion on the downside for the last couple of sessions and is expected to continue to be a support zone.

Ajit Mishra, VP-Research, Religare Broking Ltd

The recent surge in the index lacks decisiveness due to underperformance by the banking pack, which holds considerable weight in the Nifty. The continuous profit-taking in the broader indices is also keeping the participants on the edge.

It will be prudent to limit naked leveraged positions and be cautious in stock selection.

Sachin Gupta, AVP, Research, Choice Broking

Technically, the index is in a bullish trend and trading upward with higher high and higher low formation for the last couple of days.

On the hourly chart, it has given a breakout of immediate consolidation levels and managed to close above 16,500. The Parabolic SAR and Supertrend is also supporting the index to move upward.

The MACD & Stochastic indicated a positive crossover on the weekly chart, which suggests bullish strength in the index. At present, the Nifty has immediate support at 16,450, while resistance may come around 16,800.

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