F&O Talk: Nifty consolidation to continue says Sudeep Shah; gives Tata Motors, Lenskart, Honasa strategy

The Indian stock market closed lower on Friday, with Sensex and Nifty recording marginal losses despite oil prices stabilising around $87 per barrel. Sensex dropped 71 points to 78,009, while Nifty 50 fell 30 points to 24,366. Broader markets also experienced a decline, with Nifty Smallcap 100 and Nifty Midcap 100 indices falling by approximately 0.7%.

Analyst Sudeep Shah, vice president and head of technical & derivatives research at SBI Securities, discussed the outlook for Nifty Bank, options data, and a weekly index strategy in an interview with ETMarkets.

Shah noted that Nifty has been trading range-bound within a 500-point range since the start of August, with the daily trading range contracting to a low of 192 points. He highlighted the sharp decline in volatility and the challenge of sustained momentum during the first hour of trading sessions. Nifty has been oscillating around its 20-day and 200-day EMAs, with both moving averages flattening out due to the prolonged consolidation.

The daily RSI stood at 52, indicating a gradual loss of upside momentum, while the ADX was at 11.88, signaling a lack of strength in either direction.

The next important support for Nifty is the 50-day EMA zone of 24,200-24,150, while an upside breakout from the 24,550-24,600 zone would be crucial for the market's near-term direction. For Sensex, the 50-day EMA zone of 77,400-77,300 is anticipated to act as key support, with the 200-day EMA zone of 78,600-78,700 remaining a critical hurdle.