The Nifty 50 and Sensex closed at record highs on Friday, ending an excellent week for the Indian stock market. Due to a rise in the American market on Thursday, traders expected India to open with a gap up on Monday. However, the Dow Jones, S&P 500, and Nasdaq Composite closed at significantly lower levels on Friday.
On Wall Street, technology companies fell due to concern over a potential rate hike next week. As a result, the US market could not end the week on a high note. The Gift Nifty also suggested a gap-down opening on Monday as well. Therefore, this weekend will be stressful for traders.
There will also be some concern for the Indian market this coming week due to the expensive crude oil prices, the surge in the dollar index, and the fact that the yield on 10-year US bonds also moved high.
Nifty Support and Resistance for Monday
| S3 | S2 | S1 | Pivot Point | R1 | R2 | R3 |
|---|---|---|---|---|---|---|
| 20047.83 | 20088.77 | 20140.53 | 20181.47 | 20233.23 | 20274.17 | 20325.93 |
Nifty 50 Chart and Trend Analysis
As per the hourly chart, the Nifty trend is up, making higher highs and higher lows. As long as the share price of Nifty trades above 20100, there won’t be any change in the primary trend. So, the Nifty outlook for Monday is positive, according to the Nifty chart.
What to Do in the Nifty 50 on Monday
Looking at the global markets and the Gift Nifty index, traders must prepare for the gap-down opening on Monday with a proper trading plan and the right mindset. Indian benchmark indices, the BSE Sensex and Nifty 50, have already entered the blue-sky zone. So, as of right now, the upside levels are open where the downside levels are known.
If Nifty 50 opens below 20100 the primary trend will be slightly negative and traders must be very cautious of their long positions. But one who carried shorts in the Nifty can hold for further downside levels, as shown on the chart. The stop loss for shorts will be above 20150.
If Nifty 50 opens above 20100, the positive trend will be intact. So, bulls can hold their long positions while keeping a stop loss below 20050. The targets will be between 20250 and 20300.
Leading indicators point to a fall on Monday so any gap up or flat opening will be a golden opportunity for booking longs on opening. But please remember that leading indicators aren’t always right to follow.
But at 20000-19950, there will be a very strong support area that won’t be broken easily unless big happens globally.
PCR (PUT-CALL Ratio) and Option Chain Data of Nifty
Nifty PCR for next week’s expiry is at 1.15 which is not higher and it means Nifty is not overbought. So, Nifty can take support on lower levels after the gap-down opening on Monday.
Also, if we check the option chain data of Nifty future, the highest open interest for PUTS and CALLS are at 20100 and 20200, respectively. So, it’s clear that the Nifty 50 will trade in a small range of only 100 points. The maximum higher level for the Nifty 50 will be between 20000 and 20300.
Market Before Ganesh Chaturthi
If we consider the previous 30-day movement before Ganesh Chaturthi of the last 5 years, the Indian market never fell and instead closed green on the last 5 occasions. If we believe in the history of the stock market, then this year may also not be an exception.
So, the Nifty 50 may arrest fall on Monday as well ahead of Ganesh Chaturthi 2023 on September 19, despite weakness in global markets.
So, I believe buying on the dips on Monday may also be a profitable idea instead of fresh short selling.
Conclusion
After analyzing all technical parameters and the history of the Indian stock market before Ganesh Chaturthi, we can conclude that the Nifty 50 won’t fall much on Monday. But one mustn’t ignore the activities of the global equity markets and other asset classes like energy, bullions, and currency.
Wishing you all a VERY HAPPY GANESH CHATURTHI 2023!
Disclaimer: This article is purely based on the writer’s self-analysis and intuition. So, please take it as only educational material. Also, the writer is not a SEBI-certified research analyst!
