Volatile Week Ahead? - Pre Market Analysis

Here are some of the major updates that could move the markets today:

Stocks

Larsen & Toubro is committed to work across the green energy value chain and plans to invest up to $2.5 billion over the next 3-4 years. The investment of such a large scale in the green energy sector depends upon how the market evolves.

One97 Communications has approved the re-appointment of Vijay Shekhar Sharma as managing director and chief executive officer of the company.

JSW Steel has entered into a 50-50 joint venture agreement with National Steel Holding (NSHL) for establishing scrap shredding facilities in India. NSHL is engaged in the business of metal recycling, collection and processing based in Auckland, New Zealand.

Adani Power said it will acquire DB Power, which owns and operates a 2x600 MW thermal power plant at district Janjgir Champa in Chhattisgarh, at an enterprise value of Rs 7,017 crore for cash consideration.

Brigade Enterprises sales bookings rose 70 per cent annually to Rs 813.9 crore in the first quarter of this fiscal on better housing demand. The sales bookings of the Bengaluru-based developer stood at Rs 480 crore in the year-ago period.

CDC Group, the development finance institution owned by the UK government, divested a 3.56 per cent stake in IIFL Finance  by offloading 1,35,01,587 shares at an average price of Rs 335.64 apiece for Rs 453.16 crore through an open market transaction. as per the bulk deal data available with the NSE.

What to Expect? 

NIFTY opened flat at 17,975 on Friday and consolidated with bearish bias for a few minutes. There was a sudden spike to the downside and the falling continued. The index finally closed at 17,758, down by 198 points or 1.1%.

BANK NIFTY opened flat at 39,745 and profit booking kicked in. The index took support at 39,500 for a while but the sellers pushed the index lower and even 39K was breached. BNF closed the day at 38,986, down by 670 points or 1.69%.

IT closed flat.

The US markets closed in the red weighed down by the IT stocks and the  European markets closed mixed, with DAX falling heavily and FTSE closing flat.

The Asian markets are mixed with the Chinese markets trading higher. The U.S. Futures and the European futures are trading in the red now.

SGX NIFTY is trading at 17,685 indicating a gap-down opening.

NIFTY has supports at 17,700, 17,640, 17,500 and 17,340. We can expect resistances at 17,820, 17,900, 17,960, 18,000 and 18,055.

BANK NIFTY has supports at 38,760, 38,500, 38,350 and 38,000. Resistances are at 39,000, 39,200, 39,670 and 40,000.

NIFTY has the highest call OI build-up at 18,000. The highest put OI build-up is at 17,000 followed by 17,500.

BANK NIFTY has the highest call OI build-up at 39,500 and the largest put OI build-up also is at 38,000.

Foreign Institutional Investors net bought shares worth Rs 1,100 crores. Domestic Institutional Investors net sold shares worth 1,600 crores.

INDIA VIX  is at 18.3.

As we discussed in Dalal Street Report yesterday, we can be bullish as long as 17,300 is protected. We do not have major local cues this week. But we have Jackson Hole Symposium this week, from 25th to 27th August. Jerome Powell will have to answer the questions regarding rising inflation and the interest rate hike strategy here. The most influential people would join the event that takes place annually in Wyoming. Let us follow the event closely. There will be volatility this week for the same reason.

You can see that the German markets are moving down in the last days. Germany's Producer Price Index rose 37.2% YoY. The estimate was 32% and the previous data was 32.7%. Energy shortage is the major reason. Looking at MoM data, the expected was 0.6%. And the figure came out at 5.3%! This is the highest since 1949! This is one reason why the global markets were in red on Friday. Let us see where Europe opens today.

The day candle formed on Friday was a bearish engulfing candle, engulfing the previous three candles. This is a very weak sign. The weekly candle also was a red candle, with a long upper shadow. But considering the steep rally we had last week, this should be just a pull-back. 

The global markets indicate a weak start for NIFTY. You can see that there is recovery in the global markets from the low. Let us see if the bulls make use of the opportunity to buy the dip or if there will be a continuation for the pull-back.

I will be watching 17,640 on the downside and 17,820 on the upside.

Follow us on the marketfeed app’s Signal section to get real-time updates from the market. All the best for the day!

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