 "Sensex, Nifty outlook July 15: Gap-up open likely; FIIs add longs in F&O")
Stock market preview Monday, July 15, 2024: The BSE Sensex and the Nifty may attempt to scale new highs in trades today following a strong finish led by IT shares last week.
The S&P BSE Sensex hit an all-time high of 80,894, and the Nifty 24,592, before settling with gains of 622 points and 186 points, respectively, at 80,519 and 24,502 on Friday.
The Q1 earnings will slowly pick up pace this week, with Jio Financial Services, HDFC AMC and HDFC Life among key companies announced to results on Monday.
That apart, investors will also react to an uptick in CPI-based inflation to 5.08 per cent in June, and stronger growth in India of Industrial Production at 5.9 per cent in May. Today, the WPI-based inflation numbers will be released.
At 07:00 AM, GIFT Nifty futures quoted around 24,619 levels, hinting at a likely 50-odd point opening gap for the Nifty 50 index on Monday.
Vinod Nair, Head of Research at Geojit Financial Services in a note said globally, economic data like China GDP, EuroZone CPI inflation, ECB policy, and the US Fed chair speech will be watched carefully by investors this week.
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Globally investors will also closely track developments on the upcoming US elections following Donald Trump’s assassination bid in rally on Sunday, wherein the former US President suffered an ear injury.
Global mood
On Friday, the US market ended with gains up to 0.6 per cent as tech shares bounced back in trade. Dow Jones ended over the 40,000-mark for the first-time ever. The S&P 500 was atop 5,600, while NASDAQ shut shop at almost 18,400 levels.
The stock futures, in pre-market deals, were up around 0.2 per cent post Donald Trump’s assassination bid.
The US 10-year bond yield quoted around 4.24 per cent. Among commodities, Gold futures hovered around the $2,400-mark, while Brent Crude Oil futures languished around $85 per barrel levels.
Equity markets, in the Asia-Pacific region, displayed a mixed trend. The Australian stock indexes rallied up to 0.9 per cent each. Kospi was flat. Hang Seng, Shanghai and Taiwan slipped up to 0.5 per cent each. Japan’s Nikkei was closed for trading today.
FII, DII trading activity
Foreign institutional investors (FIIs) net bought stocks worth Rs 4,021.60 crore in the cash market on July 12. Domestic institutional investors (DIIs), on the other hand, were net sellers of shares to the tune of Rs 1,651.45 crore on Friday.
In the derivatives segment, FIIs were net buyers of 20,763 index futures contracts, amounting to Rs 1,414.40 crore on Friday. FIIs net purchased 12,431 contracts in Nifty futures, and 8,156 contracts of Bank Nifty futures.
Pursuant to which, FIIs long-short ratio in index futures rose to 3.8:1. This ratio means that FIIs hold near-about 4 long positions in index futures for every bet on the short side. The FIIs longs in index futures stood at 79.35 per cent, while shorts at 20.65 per cent.
On the other hand, DIIs and retail investors’ index long-short ratio continued to remain around 0.5:1; meaning 2 index short bets for every long trade.
Trading strategy for Monday, July 15 - Should you be a buyer or seller in the Nifty, Bank Nifty today? Here’s what market experts recommend:
Rajesh Bhosale, Equity Technical Analyst, Angel One
On the daily chart, prices are gradually inching higher with a series of small body candles observed within a range. Throughout the week, dips were bought, and the 24,150 – 24,200 zone acted as a strong support for the bulls. Conversely, the resistance around 24,450 – 24,500 was broken due to strong buying in the IT sector on Friday.
Moving forward, despite the markets appearing overbought by various measures, there are no signs of weakness, and bulls remain in control, supported by sector rotation.
The ideal strategy would be a stock-centric approach, focusing on the theme of the day for better trading opportunities. For the Nifty, close attention needs to be paid to the 24,200 – 24,150 zone. If this level is breached, it could signal the first sign of weakness, possibly reaching 24,000 and below ahead of the budget.
On the flip side, there is no clear resistance as prices are trading in uncharted territory. However, the golden retracement of the panic fall seen on election result day is around 24,610, which is technically significant, along with 24,700, seen as key resistance levels.
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities
The Nifty hit a new all-time high of 24,592 on Friday. The 24,300 & 24,400 Strike saw significant put writing over call writing. Strong put writing was observed at the 24,500 too. The put writers (1.62 lakh contracts) lead the call writers (1.58 lakh contracts) marginally at the 24,500 Strike and the option activity at this strike will provide cues about Nifty’s future direction.
The Bank Nifty formed a gravestone doji pattern on July 12, indicating indecision. Significant call writing was observed at the 52,500 & 52,700 Strike in the Bank Nifty. The call writers have massive positions built at the 52,500 Strike and the option activity at this strike will provide cues about Bank Nifty’s direction in the coming week.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
Technically, the Nifty has crossed the barrier of 24,460 and almost tested short term target of 24,600. The index must break through the 24,600 - 24,620 resistance level to trigger fresh bullish momentum. Until then, investors should consider buying on dips in the Nifty, with support near 24,170.
The Bank Nifty formed a doji candle near the 21-days EMA support. As long as the index holds above 51,750, a buy-on-dips strategy should be adopted in Bank Nifty. On the upside, 52,800 and 53,000 will serve as strong resistance levels.
Rupak De, Senior Technical Analyst, LKP Securities
The Nifty has given a consolidation breakout on the daily chart, driven by a strong technical breakout in IT giants. The sentiment looks positive from here, as the indicators and popular overlays indicate a continuation of strength.
Support for the Nifty is visible at 24,400, where significant short buildup has been seen by the put writers. The buy-on-dips strategy should favor the street until Nifty falls below 24,400. On the higher end, the current rally might extend towards 24,800.
Bank Nifty from Rupak De, Senior Technical Analyst, LKP Securities
On the Bank Nifty, the sentiment might continue to favor the bulls, as the index appears to have found support at the 21 EMA on the daily timeframe on Thursday. The buy-on-dips strategy looks best from the current perspective until it falls below 51,700. On the higher end, resistance is visible at 52,800; above 52,800, the index might continue its upward journey towards 54,000.
Stocks in F&O ban period
A total of 11 stocks are in futures & options (F&O) ban period on Monday - Aditya Birla Fashion Retail, Balrampur Chini, Bandhan Bank, Chambal Fertiliser, GMR Infra, GNFC, Indian Energy Exchange (IEX), India Cements, Indus Tower, Piramal Enterprises and RBL Bank.
to list on the NSE SME platform today. Both the IPOs commanded huge demand in the grey market and hence are expected to list at the NSE cap of 90 per cent over their respective issue price.
Primary market update
Six SME IPOs, two on the BSE and four on the NSE are open for subscription on Monday.
On the NSE – Tunwal E-Motors Rs 115.64 crore IPO to open for subscription at a fixed price of Rs 59 per equity share. Investors can bid for the issue in multiples of 2,000 shares. The issue closes on July 18.
Meanwhile, Sahaj Solar IPO will close today. The issue so far has garnered 89.5 times subscription.
Similarly, Prizor Viztech and Sati Poly Plast were subscribed up to 12.3 times and 20 times at the end of Day 1 of the offer period on Friday.
That apart, Aelea Commodities and Three M Paper Boards are open for subscription on the BSE SME platform.