Market Outlook for 05 August 2024

Nifty Prediction for Tomorrow - 05th August

Nifty tested a new milestone of 25000 in the week gone by, but the index corrected on the last trading session due to negative cues from global markets and ended the week around 24700 with a weekly loss of half a percent.

The market participants cheered the new record of 25000 in Nifty on Thursday, but the party was short-lived as the global markets corrected sharply which had a rub off effect on our markets in the last trading session. On the daily charts, the RSI has formed a negative divergence and a new high in the index has not been confirmed by a new high on the oscillator. Such divergences usually lead to a corrective phase and hence, we could see a down move in the index in the near term.

In case of any such correction, the index could first approach the 20 DEMA which is placed around 24550 and if that is breached, then it could even extend towards 24200 mark. Traders are advised to stay cautious for the short term and lighten up long positions. Any pullback move towards 25000 could face selling pressure and the index needs to sustain above this psychological mark for a continuation of the uptrend.   

Amongst sectoral indices, only Pharma index has shown signs of strength on weekly closing basis while several sectoral indices have either entered a corrective phase or are in process of forming a negative RSI divergence similar to the benchmark index. 

                  Rub-off effect on Indian markets due to global sell-off

Bank Nifty Prediction for Tomorrow - 05th August

In last one week, the Bank Nifty index has consolidated in a range but it has broadly underperformed as it is still away from its previous highs while many indices have registered a new record high.

Also, the mid-week pullback in the index witnessed resistance around the 61.8 percent mark of the recent correction, thus forming a lower high on the index. Until the index surpasses the hurdle of 52250-52350, it is better to avoid bottom fishing while one should reassess if the index reached the support of 50200-50000 zone.      

Nifty, Bank Nifty Levels and  FINNIFTY Levels:

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