The market saw sharp selling on July 21 as Infosys and HUL guidance hit sentiment, even as participants turned cautious ahead of earnings announcements from heavyweights Reliance Industries, which came out with its numbers later in the day, and ICICI Bank, which shared its June quarter report card the next day.
The Sensex tanked 888 points to 66,684, while the Nifty50 declined 234 points to 19,745 and formed a bearish candlestick with long upper shadow on the daily charts. On the hourly charts, the index took support at 50-day exponential moving average (19,704) and on the daily charts, it defended 19,700, which can be immediate support.
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“A crucial support level for the Nifty lies at 19,700, marked by significant Put writing. Should the index breach this level, it may lead to a substantial market correction. On the upside, resistance is positioned at 20,000,” Rupak De, senior technical analyst at LKP Securities said.
On the broader front, we have mixed trends as the breadth was tilted in favour of bears with 2:3 ratio. The Nifty midcap 100 index was down 0.4 percent, while the smallcap 100 gained 0.7 percent.
Volatility also cooled down from the day’s high, indicating stablity in near term. India VIX, a measure of volatility expected over the next 30 days, fell 2.54 percent to 11.49 levels.
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We have collated 15 data points to help you spot profitable trades:
Note: The open interest (OI) and volume data of stocks are the aggregates of three-month data and not just the current month
Key support, resistance levels on Nifty
The pivot point calculator suggests that the Nifty may get support at 19,706 followed by 19,662 and 19,590. In case of an upside, 19,849 can be the key resistance area followed by 19,893 and 19,965.
Nifty Bank
On July 21, the Bank Nifty traded better than benchmarks even though it closed in the red. The index defended 46,000 and also hit a fresh intraday high of 46,369.5 before closing the session 112 points down at 46,075, forming a Doji candlestick on the daily charts.
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“Though it was volatile, it traded in a range. The hourly momentum indicator has triggered a negative crossover, which can lead to consolidation in the short term, however, the overall uptrend is still intact and we believe that this dip is a pullback in the overall up move and not a trend reversal,” Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
On the upside, he expects the index to target 46,500 in the short term. The pivot point calculator indicates that the Bank Nifty is likely to take support at 45,954 followed by 45,849 and 45,680, while 46,293 can be the initial resistance zone followed by 46,398 and 46,567.
Call options data
The maximum weekly Call open interest (OI) remains at 19,900 strike, with 1.1 crore contracts, which can act as a resistance for the Nifty. This is followed by 1.02 crore contracts at 19,800 strike, while 20,000 strike has 97.1 lakh contracts.
Meaningful Call writing is at 19,900 strike, which added 74.34 lakh contracts, followed by 19,800 and 20,000 strikes, which added 58.68 lakh contracts, and 39.02 lakh contracts.
The maximum Call unwinding is at 19,500 strike, which shed 2.16 lakh contracts, followed by 19,400 and 19,000 strikes, which shed 1.88 lakh and 90,400 contracts.
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Put option data
On the Put side, the maximum open interest is at 19,000 strike, with 81.25 lakh contracts, which can be an important support for the Nifty.
This is followed by the 19,800 strike, comprising 80.92 lakh contracts, and the 19,500 strike, with 57.24 lakh contracts.
Put writing was seen at 19,600 strike, which added 18.53 lakh contracts, followed by 19,100 and 19,500 strikes, which added 10.41 lakh and 8.67 lakh contracts, respectively.
Put unwinding was at 20,000 strike, which shed 17.71 lakh contracts, followed by 19,900 and 19,800 strikes, which shed 14.46 lakh contracts and 2.34 lakh contracts.
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Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. The highest delivery was seen in Alkem Laboratories, Power Grid Corporation of India, Crompton Greaves Consumer Electricals, Asian Paints, and Dabur India among others.
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33 stocks see a long build-up
Mphasis, IndiaMART InterMESH, Coromandel International, Sun TV Network, and Can Fin Homes were among the 33 stocks to see a long build-up based on the open interest (OI) percentage. An increase in open interest and price indicates a build-up of long positions.
54 stocks see long unwinding
Based on the OI percentage, 54 stocks, including Havells India, Dr Lal PathLabs, Delta Corp, Punjab National Bank, and Container Corporation of India, saw a long unwinding. A decline in OI and price indicates a long unwinding.
73 stocks see short build-up
A short build-up was seen in 73 stocks, including Reliance Industries, UltraTech Cement, Cholamandalam Investment and Finance Company, Metropolis Healthcare, and Dixon Technologies. An increase in OI along with a price fall indicates a build-up of short positions.
28 stocks see short-covering
Based on the OI percentage, 28 stocks were on the short-covering list. These included Atul, Balrampur Chini Mills, United Spirits, ABB India, and RBL Bank. A decrease in OI along with a price increase is an indication of short-covering.
Bulk deals
Bandhan Bank: Financial services firm BNP Paribas Arbitrage bought 88.86 lakh equity shares or 0.55 percent equity stake in the Kolkata-based private sector lender via open market transactions at an average price of Rs 211 a share.
Railtel Corporation of India: Quant Mutual Fund purchased 23 lakh equity shares or 0.71 percent shareholding in the state-owned telecom infrastructure provider at an average price of Rs 150.84 a share.
Results on July 24
Tata Steel, HDFC Asset Management Company, Canara Bank, IDBI Bank, TVS Motor Company, PNB Housing Finance, Poonawalla Fincorp, Spandana Sphoorty Financial, Chennai Petroleum Corporation, Craftsman Automation, Gravita India, IIFL Securities, Jammu & Kashmir Bank, JK Paper, Mahindra Logistics, Sharda Cropchem, Shoppers Stop, SRF, and Tamilnad Mercantile Bank will be in focus ahead of quarterly earnings on July 24.
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Stocks in the news
Reliance Industries: The billionaire Mukesh Ambani-led Reliance reported consolidated net profit at Rs 18,258 crore for the quarter ended June 2023, down 5.9 percent from the year-ago period as muted performance in oil-to-chemicals (O2C) partly offset the strong growth in consumer-facing businesses. Higher finance cost and depreciation also weighed on the company’s bottomline. Total revenue in Q1 declined to Rs 2.31 lakh crore from Rs 2.42 lakh crore a year ago as O2C segment sales declined tracking the weakness in crude prices.
ICICI Bank: The country’s second-largest private sector lender reported a 39.7 percent on-year growth in standalone profit at Rs 9,648 crore for the quarter ended June FY24 despite elevated provisions and contingencies. Net interest income increased by 38 percent on-year to Rs 18,227 crore with net interest margin expansion of 77 bps on-year at 4.78 percent.
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Kotak Mahindra Bank: The bank reported a standalone profit of Rs 3,452.3 crore for the June quarter, growing 66.7 percent over a year-ago period despite a rise in provisions & contingencies. Net interest income grew 32.7 percent on-year to Rs 6,233.7 crore.
AU Small Finance Bank: The small finance bank’s profit grew 44 percent on-year growth to Rs 387 crore in the June quarter. The bank saw a 39 percent increase in pre-provision operating profit at Rs 546 crore. Net interest income rose 28 percent year-on-year to Rs 1,246 crore with net interest margin declining 20 bps to 5.7 percent
Yes Bank: The private sector lender recorded a profit of Rs 343 crore for the June quarter despite doubling the provisions and contingencies YoY, with operating profit growing 38.8 percent YoY to Rs 818 crore. Net interest income grew by 8.1 percent on-year to Rs 2,000 crore.
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RBL Bank: The bank has reported a profit of Rs 288 crore for the June quarter, up 43 percent from the year-ago period despite an increase in provisions and contingencies. Net interest income increased 21 percent on-year to Rs 1,246 crore.
Lupin: The pharma major received tentative approval from the United States Food and Drug Administration (US FDA) under the US President’s Emergency Plan for AIDS Relief (PEPFAR) for its new drug application for Dolutegravir Lamivudine and Tenofovir Alafenamide tablets. This product would be manufactured at Lupin’s Nagpur facility.
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Biocon: The FDA conducted two GMP inspections at Biocon’s insulins manufacturing facility in Malaysia during July 10-20. The US health regulator issued a Form 483 with six observations for drug substance, drug product units and quality control laboratories as well as two observations for the delivery devices unit.
One 97 Communications: The Paytm operator narrowed its net loss in the June quarter to Rs 357 crore from Rs 644.4 crore in the year-ago period. Revenue grew by 39 percent on-year to Rs 2,342 crore led by an increase in GMV, merchant subscription revenues, and growth of loans distributed through its platform.
Fund Flow
FII and DII data
Foreign institutional investors (FII) sold shares worth Rs 1,998.77 crore, whereas domestic institutional investors (DII) bought shares worth Rs 1,290.73 crore on July 21, provisional data from the National Stock Exchange (NSE) shows.
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Stocks under F&O ban on NSE
The NSE has retained Balrampur Chini Mills, Delta Corp, Indiabulls Housing Finance, L&T Finance Holdings, Manappuram Finance, and Punjab National Bank in its F&O ban list for July 24. Securities banned under the F&O segment include companies where derivative contracts have crossed 95 percent of the market-wide position limit.
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