Indian equities closed lower on Friday, August 29, capping a volatile month. At the closing bell, the Sensex fell 270.92 points, or 0.34%, to 79,809.65, while the Nifty slipped 74.05 points, or 0.30%, to 24,426.85. According to Sudeep Shah, Vice-President & Head of Technical and Derivatives Research, SBI Securities, August saw the Nifty trading within a narrow 816-point range – the lowest since March 2024. “The index reflected a tug-of-war between supportive domestic cues and global headwinds.
Optimism post S&P’s upgrade and GST reforms quickly faded as US-India tariff tensions triggered a sharp reversal,” he said.
The Nifty lost 1.38% in August, marking its second straight month of negative returns.
Key Levels for Nifty Next Week
Technically, the Nifty has slipped below its 20-day, 50-day, and 100-day EMAs, signalling weakening momentum. Shah noted:
Support: “The 200-day EMA zone of 24,300-24,250 has emerged as the make-or-break level. A sustained break below 24,250 could accelerate the downside toward 24,000,” he said.
Resistance: On the upside, the 24,650-24,700 zone remains crucial. “Only a decisive move above this band could revive bullish sentiment and pave the way for recovery,” Shah added.
Bank Nifty Under Pressure
The Bank Nifty has been underperforming frontline indices, shedding nearly 4% in August. Shah highlighted the emergence of a Dark Cloud Cover pattern in July, which was validated by August’s decline.
“The index corrected sharply by over 2,400 points within nine sessions, slipping below its 20-, 50-, and 100-day EMAs. The daily RSI and MACD both stay in bearish territory,” he explained.
Immediate support: 53,600-53,500
Further downside: Below 53,500, correction could extend to 52,900-52,400
Resistance: 54,500-54,600 zone
FII Outflows Keep Pressure on Markets
Foreign institutional investors (FIIs) remain cautious. Shah pointed out that the FII long-short ratio is at a dismal 8.3% and has stayed below 10 for most of August.
“Since July, FIIs have pulled out nearly ₹94,500 crore, while strong DII inflows of ₹1.56 lakh crore have cushioned the markets from a deeper correction,” he said. Still, the strengthening dollar and tariff concerns have kept FIIs on the sidelines.
Trading Strategy in Volatile Times
With volatility set to continue, Shah advised traders to remain selective.
“Traders should prioritize quality stocks, practice strict risk management, align trades with the broader trend, and wait for clear price confirmation before taking positions,” he suggested.
Sectoral Outlook: FMCG, Autos, Durables in Focus
Among sectors, Nifty FMCG is showing selective strength post-GST rate cut. While the broader index has been consolidating, stock-specific moves are evident. “Select FMCG names are beginning to show bullish trends – investors should focus on outperformers rather than the entire pack,” Shah explained.
He also highlighted Automobiles, FMCG, and Consumer Durables as likely short-term outperformers, supported by strong rollovers and improving consumption sentiment.
On the flip side, Nifty Private Bank, CPSE, PSE, Defence, Financial Services, Oil & Gas, IT, Media, PSU Bank, and Realty indices have shown weak rollovers, suggesting continued underperformance.
Stock Picks to Watch
Within the positive sectors, Shah identified the following stocks as technically strong:
Britannia
CG Power
Dalmia Bharat
Syrma SGS
Lux Industries (LUAXTECH)
CarTrade Tech
Jamna Auto
Avantel
“These stocks are looking technically good and could deliver outperformance in the near term,” he said.
Stock Market Next Week
The coming week will be crucial as Nifty tests the 24,300-24,250 support zone. A breach could trigger further downside, while stability above 24,650 may revive buying. With Bank Nifty weakness, persistent FII outflows, and global tariff tensions, traders must brace for volatility and remain stock-selective.