Raja Venkatraman recommends three stocks for 8 September

The Nifty 50 closed 0.5% lower at 23,779.15, while the Sensex fell 0.5% to 76,132.81. Over the past four weeks, the benchmarks have shed nearly 2.7% and 2.5%, respectively, pressured by rising crude oil prices and global bond yields.

Market sentiment remained fragile, with 14 of the 16 major sectors ending in the red. The IT index dropped 2.3% as stronger US jobs data reinforced the likelihood of a September Fed hike, raising concerns over client spending for Indian IT firms heavily reliant on US revenues. Brent crude futures rose 0.6% to $96.8 a barrel after fresh US–Iran clashes in the Strait of Hormuz, stoking inflationary fears.

Among individual stocks, PVR Inox tumbled 6.1% following reports of alleged kickbacks linked to property projects, while Zee Entertainment fell 6.4% after a first information report (FIR) was filed against founder Subhash Chandra and others over fraud allegations. Broader indices displayed mixed trends, with small caps flat and mid caps down 0.5%, underscoring cautious investor sentiment.

Outlook for trading

Markets have managed to hold their ground, extending a multi-day rebound that offers a sense of hope as the key 24,000 level continues to hold. Unlike last week, this week saw broader market indices show some solidarity. However, despite this revival, we are not yet out of the woods, and this could prove to be an intermittent rally. Upcoming domestic and global triggers are expected to drive market sentiment in the week ahead. Movement last week was largely driven by short covering, with global markets closed and lacking clear direction. Volatility will remain a constant factor and will take time to stabilize.

Global markets remain tense due to a lack of clarity. This uncertainty has stoked fears that central banks may tighten policy and raise borrowing costs—a move that could hurt corporate earnings and cloud the outlook for what had been projected as another solid year of global economic growth.

On the daily chart, the previous range-bound action has given way, with news flow continuing to drive price movement. More momentum is required to push higher; Wednesday’s bullish display was primarily news-driven short covering rather than genuine buying interest.

Looking at option build-up at expiry, call writing at the 23,800 strike is capping the upside. Short rollovers were on the higher side, and both Nifty and Bank Nifty—which began the series with a heavily bearish outlook—are holding their ground. Meanwhile, renewed geopolitical conflicts threaten to bring back lingering worries of another bearish sell-off.

While there are attempts to cover short positions, a lack of aggressive buying interest is keeping a lid on the recovery. As the market attempts to break out of its range, further short covering could emerge today. Downside support for Nifty has shifted to 23,750; traders can evaluate how to use pullbacks toward this level as buying opportunities.

Once again, we end the week on a precarious note. A more decisive signal is emerging as Nifty moves decisively below 24,000, with Open Interest data highlighting 23,800 as the Max Pain point. Given the prevailing range-bound and volatile environment, it is best to tone down market participation.

Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.

Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.

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