Technical View: Rebound possible as long as Nifty holds 24,300 support, Bank Nifty stays above 100 DEMA for 4th session

Nifty Outlook for August 13

The Nifty 50 could not see follow-through buying due to profit-booking pressure in the second half and closed 0.4 percent lower on August 12. However, as long as the index defends the 24,300–24,350 support zone (the low of the previous three candles), a rebound toward 24,700 remains possible. Above that level, the 24,800–24,850 zone is a crucial hurdle (which coincides with the midline of the Bollinger Bands and the 50-day EMA). However, a decisive fall below the support zone could strengthen the bears, according to experts.

The Nifty 50 opened lower but immediately gained strength to rally up to 24,703. However, these gains could not be sustained in the second half due to profit-taking pressure. The index wiped out all those gains and closed at 24,487, down 98 points, forming a bearish candle with a long upper shadow on the daily charts.

Technically, this market action indicates a lack of strong upside momentum to surpass the overhead hurdle.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the short-term uptrend that resumed after Monday’s sharp upmove remains intact. He expects buying to emerge near the support levels of 24,300–24,400 in the coming sessions.

Hence, "one may expect Nifty to retest the crucial hurdle of around 24,700 in the short term," he said.

The weekly options data suggested that the Nifty 50 is expected to trade within a broad range of 24,000–25,000, with an immediate range of 24,400–24,700.

On the Call side, the maximum Call open interest was placed at the 25,000 strike, followed by the 24,700 and 24,600 zones, with the maximum Call writing at the 24,700 strike, followed by the 25,000 and 24,500 strikes.

On the Put side, the 24,000 strike held the maximum Put open interest, followed by the 24,500 and 24,400 strikes, with the maximum Put writing at the 23,800 strike, followed by the 24,700 and 24,550 strikes.

Bank Nifty

The Bank Nifty underperformed the benchmark Nifty 50, declining 467 points (0.84 percent) to 55,044. The banking index remained within the previous day's trading range and formed a bearish candle on the daily timeframe, while managing to touch the 10-day EMA (55,544) and defend the 100-day EMA (54,950).

In fact, it has been in a tight range of 54,900–55,650 for the last four days.

"The zone of 54,700–54,600 will act as crucial support for the index; however, on the upside, the zone of 55,400–55,500 will act as an immediate hurdle," Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, said.

Meanwhile, the India VIX, the fear gauge, remained above the short-term moving averages, closing 0.12 percent higher at 12.23 and extending its upward journey for the third straight session, which indicates some caution for bulls.

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