Nifty 50 Shows Resilience Amid Tariff Concerns on August 8

The Nifty 50 index demonstrated a notable recovery on August 7, closing 22 points higher in response to recent tariff announcements by former President Donald Trump. The index finished the day at 24,596, successfully bouncing back from a low of 24,346 earlier in the session. Despite this positive close, the index remained below its 20-day and 50-day exponential moving averages (EMAs), indicating that bearish sentiment is still prevalent among traders.

Experts suggest that for the Nifty 50 to initiate a more robust upward movement towards 24,900, it must sustain above the 100-day EMA, which currently stands at 24,595. Until such a breakthrough occurs, the expectation is for continued consolidation and range-bound trading. Support levels are identified at 24,350, the low recorded on August 7.

Key Indicators and Market Sentiment

The Nifty 50’s performance reflects a mixed sentiment in the market. It formed a bullish candle with a long lower shadow, suggesting that investors are willing to buy on dips. Despite this, the index continued to demonstrate a pattern of lower highs and lower lows. The relative strength index (RSI) remains low at 39, indicating bearish momentum, while the moving average convergence divergence (MACD) is positioned below zero, further signaling caution.

In the Bank Nifty sector, the index also created a bullish candle but continues to show lower tops and lower bottoms. Although it remains above the 100-day EMA, it trades under short-term moving averages. The Bank Nifty’s resistance levels are set at 55,615, 55,766, and 56,011, while support is found at 55,125, 54,974, and 54,729.

Options Data and Market Dynamics

Analyzing options data reveals key insights into market expectations. For the Nifty 50, the maximum call open interest is at the 25,000 strike, with 5.34 million contracts, indicating significant resistance. Conversely, the maximum put open interest is at the 24,500 strike, which is seen as a crucial support level. The put-call ratio (PCR) climbed to 1.06, indicating a shift towards a more bullish sentiment among traders.

In the Bank Nifty, the 57,000 strike holds the highest call open interest, while the maximum put open interest is at 57,000 as well. This suggests a key battleground for the index in the near term, with traders closely monitoring these levels for potential movements.

Funds flow data shows a mix of long and short positions across various stocks, with 71 stocks indicating a long build-up and 28 showing long unwinding. Short positions are building in 43 stocks, while 78 stocks experienced short-covering.

The India VIX, often referred to as the market’s fear gauge, fell by 2.28 percent to 11.69, indicating a slight easing of market anxiety, which could provide some support for bullish traders.

Investors are advised to approach the market with caution as it navigates through these levels. As always, consulting certified financial experts before making investment decisions is recommended. These insights are provided by Moneycontrol, a reputable source in the financial news space.

In summary, while the Nifty 50 and Bank Nifty show signs of resilience, the broader market sentiment remains cautious, and traders should remain vigilant as they track key resistance and support levels in the days ahead.