Weak August Wrap: Nifty Loses 1.38%, Nifty Bank Extends Deeper 4.12% Cut

August ended on a subdued note for Indian equities, with both Nifty and Nifty Bank closing the month in the red, weighed down by persistent selling pressure, weak global cues, and caution ahead of key domestic triggers.

Nifty: Selling Pressure Persists

The Nifty 50 index ended Friday’s session at 24,426.85, down 0.30%, after forming a bearish inverted hammer on the daily chart — a sign of selling dominance at higher levels.

• Key levels breached: The index failed to sustain above the 24,550 hurdle, leaving the short-term trend weak.
  
  
• Broader performance: Nifty lost 1.78% for the week and 1.38% for the month of August, signaling rising caution.
  
  
• Indicators:
  
  
  • RSI slipped to 39, reflecting weakening momentum.
    
    
  • MACD slipped back into a negative crossover, with a declining histogram confirming the bearish tone.
    
    

Support & Resistance

• Support: 24,300–24,240 zone is immediate; a breach could drag the index toward the 200-SMA at 24,070.
  
  
• Resistance: 24,520–24,600 remains the first barrier, followed by the 50-SMA at 24,650, which must be reclaimed for recovery.
  
  

📉 Outlook: The stance remains “sell on rise”, as any bounce may face fresh supply pressure given the strained advance-decline ratio.

Nifty Bank: Oversold, But Still Weak

The Nifty Bank index closed at 53,655.65, down 0.31%, extending losses for the fifth straight session. The daily chart showed another bearish candle, keeping the index close to its swing low of 53,483.

• Broader performance: Bank Nifty lost 2.71% for the week and a sharper 4.12% for the month, underperforming Nifty and highlighting sectoral weakness.
  
  
• Indicators:
  
  
  • RSI slipped further to 28, now firmly in oversold territory.
    
    
  • MACD stays negative, reinforcing the bearish bias.
    
    

Support & Resistance

• Support: Immediate support at 53,483; a close below could accelerate the slide toward the 200-SMA at 52,900.
  
  
• Resistance: First hurdle at 54,000, with stability unlikely unless the index decisively reclaims 54,400.
  
  

📉 Outlook: Despite oversold readings, the trend remains fragile. The stance stays “sell on rise” unless a strong reversal pattern emerges above resistance zones.

Market Wrap

The August expiry highlights a shift in sentiment from recovery to consolidation and caution, as both indices slipped below crucial short-term averages. While Nifty is still above its 200-SMA cushion, Bank Nifty’s extended weakness poses risks of deeper cuts if support zones give way.

For now, traders are advised to stay cautious, maintain light positions, and adopt a sell-on-rise approach until clear confirmation of trend reversal emerges.