Bulls staged a strong comeback in the final hour of trade, helping the benchmark Nifty 50 recover losses of nearly 250 points from the day's low and close the weekly F&O expiry session with moderate gains on August 7. The fear induced by bears in the morning—triggered by a 25 percent additional tariff imposed by Trump on top of the existing 25 percent tariff—was completely shrugged off by the bulls.
However, the sustainability of this recovery will be important to watch going forward. Now, support is placed at 24,340 (today's low), as a break below this level could open the door to the 200-day EMA (24,200). On the other hand, if the recovery continues in the coming sessions, the 100-day EMA (24,595) becomes the immediate level to watch. Sustaining above this could lead the index towards 24,700–24,750, and eventually 24,900, which will act as key hurdles, according to experts.
The Nifty 50, as anticipated, broke the June low of 24,473 right at the open and corrected down to 24,344 intraday, before a strong recovery in the last hour helped the index turn green. It closed at 24,596, just above the 100-day EMA, gaining 22 points.
On the daily charts, the index formed a bullish candle with a long lower shadow, indicating strong buying interest at lower levels—suggesting that dips are being bought into, with above-average volumes. Additionally, the histogram weakness faded, though the MACD remained below the zero line. The RSI also held its bearish crossover at 39.
"Technically, today’s candlestick pattern shows early signs of a crucial bottom reversal in the Nifty. A follow-through upmove above the initial hurdle of 24,750 could confirm the bottom reversal pattern," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
On the downside, he added, crucial support lies around 24,350.
Derivatives Data
The weekly options data suggests that the Nifty 50 may trade in the 24,400–25,000 range in the short term.
On the Put side, the maximum open interest was placed at the 24,500 strike, followed by the 24,000 and 24,400 strikes, with the maximum Put writing at the 24,500 strike, and then the 24,400 and 24,200 strikes.
On the Call side, the 25,000 strike holds the maximum open interest, followed by the 25,500 and 25,200 strikes, with the maximum Call writing at the 25,000 strike, and then the 25,500 and 24,500 strikes.
Bank Nifty
The Bank Nifty held above its 100-day EMA (around 54,900) during today’s fall, which now acts as an immediate support. The index rebounded and climbed above the 55,500 zone, closing at 55,521, up 110 points.
It also closed above the lower line of the Bollinger Bands, forming a bullish candle with a long lower shadow on the daily chart after recovering nearly 550 points from the day's low, indicating buying support at lower levels.
Looking ahead, the support zone of 55,200–55,100 will be crucial for Bank Nifty.
"As long as the index holds above 55,100, the momentum is expected to remain positive," said Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities.
On the upside, he identifies the 55,800–55,900 zone as the immediate hurdle. A sustained move above 55,900 could pave the way for a further rally towards 56,300, and eventually 56,800 in the short term.
Volatility Index
Meanwhile, the India VIX, the fear gauge, spiked during the day but failed to sustain those gains and eventually closed 2.28 percent lower at 11.69, offering some comfort to the bulls.
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