BackTrade setup for Monday, July 11, 2022: Key things to know before stock market's Opening Bell today
Trade setup for Monday, 11th July 2022: Indian market will be showing a bigger pullback to retrace the entire correction from 18,115 to the recent low of 15184, believe experts
PremiumTrade setup for Monday, 11th July 2022: Following strong global cues, Indian stocks surged on third successive session on Friday, aiding BSE Sensex and Nifty to end higher on third straight week. This upside in Indian markets was fueled mainly by sharp upside move in banking, FMCG and realty stocks. Nifty surged 88 points on Friday and ended at 16,221 levels, logging 3 per cent rise from the previous week. Volatility index India VIX ended at 18.40 down by 4 per cent. The BSE Sensex surged by 303 points to 54,482 mark. Nifty Bank rallied 204 points and finished Friday’s session at 35,124 mark.
Global markets' cues
Wall Street witnessed sharp upside on Thursday after some reports of ease in slowdown sentiments. However, it traded subdued on Friday as Dow Jones ended 0.15 per cent down whereas tech heavy Nasdaq surged 0.12 per cent. S&P 500 index went off 0.08 per cent and Small Cap 2000 ended 0.01 per cent lower.
Asian shares inched up on Friday, tracking Wall Street gains on Thursday. However, European stocks were subdued on Friday after two days of gains as investors awaited the release of U.S. non-farm payroll data for June later in the day.
Asian markets' early morning trend
In early morning trade session on Monday, the Japanese Nikkei is up 1.50 per cent, Hong Kong's Hang Seng is down by around 2 per cent whereas Chinese Shanghai is down near 1.10 per cent.
SGX Nifty technical outlook
In early morning trade on Monday, SGX Nifty index is down 87 points at 16,140 mark.
“Overall trend for SGX Nifty today is sideways to positive. High risk traders can take small range of SGX Nifty in between 16,020 to 16,380 whereas broader range for SGX Nifty today is placed in between 15,800 to 16,550 levels," said Anuj Gupta, Vice President — Research at IIFL Securities.
Nifty technical outlook
"Nifty filled the downside gap of 16,173 convincingly and closed above it. Nifty now enters a crucial resistance band of 16293-16610. On downside moves 16026 could offer support. Nifty has not gained for more than three weeks in a row since mid January 2022. It will be interesting to see whether this pattern sustains or breaks this week," said Deepak Jasani, Head of Retail Research at HDFC Securities.
Expecting bigger pull-back in the Indian markets this week, Ruchit Jain, Lead Research at 5paisa.com said, "Nifty has formed a ‘Higher Top Higher Bottom’ structure on the daily chart from the recent swing low of 15180. This move has been retracing the previous corrective phase and 61.8 percent retracement of the previous correction from 16800 to 15180 was around 16178. It was the crucial hurdle in this pullback and the index has even surpassed the same. This indicates that the market will be showing a bigger pullback to retrace the entire correction from 18115 (April 2022 high) to the recent swing low of 15184."
The 5paisa.com expert advised investors and traders to 'buy on dips' strategy this week citing, "The 50 percent retracement of this correction is seen around 16650 while the ‘200-day EMA’ hurdle is around 16550. Hence, we expect the Nifty to continue its upside move in the short term towards 16550-16650. On the flipside, the support base is shifting higher with the index upmove and the support has now shifted to 16000-15900 range. Even the option writers have built positions in 16000 strike which hints this to be an important support. In the coming week, small corrections for one to two sessions cannot be ruled out but any such corrections should be used as a buying opportunity."
Bank Nifty technical outlook
"The important pivot level, which will act as crucial support for the index, is placed at 34600, followed by 34450 mark. On the upside, key resistance levels are placed at 35650 - 35800 zones," said Chinmay Barve, Head — Technical and Derivatives Research at Profitmart Securities.
“NIFTY BANK index outperformed the benchmarks by rising more than 4.5 per cent and closed above 35,000 mark. At this juncture, the index is trading at the placement of falling trend line and 78.6 per cent retracement of the previous fall. Also it has entered the cloud area of Ichimoku. Thus going ahead; 35,500 to 36,000 zone would be a real test for the bulls since we have a placement of 200 day moving averages also there," said Mehul Kothari, AVP — Technical Research at Anand Rathi.
"Amongst sectoral indices, the Banking index has continued its outperformance and has taken the leadership along with the FMCG stocks to lift the markets higher. The structure for both these sectors remains positive and hence, traders should look for trading opportunities within these sectors," said Ruchit Jain of 5paisa.com.
Nifty Call Option data
"As per data shown by nseindia.com at 3.30 pm on 08 July, Maximum total Call open interest was seen at 16200, 16500 and 16300 strikes with total open interest of 92208, 81264 and 73610 respectively. Maximum Call open interest addition was seen at 16600 strike which added 38011 contracts followed by 16200 strike which added 36682 contracts and 16400 strike which added 32718 contracts. Call unwinding was seen at 16000 and 16100 strike, which shed 5160 contracts and 10509 contracts respectively," said Chinmay Barve of Profitmart Securities.
Nifty Put Option data
Chinmay Barve of Profitmart Securities went on to add that maximum total Put open interest was seen at 16000 and 16200 strikes with total open interest of 91850 and 83444 contracts respectively. Maximum Put open interest addition was seen at 16200 and 16000 strikes which added 69462 and 41480 contracts respectively.
Nifty Bank Call Option data
As per data shown by nseindia.com at 3.30 pm on 08 July, Maximum total Call open interest was seen at 35500 and 36000 strikes with total open interest of 70429 and 55912 contracts respectively. Maximum Call open interest addition was seen at 35500 and 36000 strikes which added 30485 and 22865 contracts respectively. Call unwinding was seen at 34800 and 34500 strikes, which shed 6696 and 5129 contracts respectively.
Nifty Bank Put Option data
As per data shown by nseindia.com at 3.30 pm on 08 July, Maximum total Put open interest was seen at 34500 and 35000 strikes with total open interest of 48799 and 75904 contracts respectively. Maximum Put open interest addition was seen at 35000 and 35100 strikes which added 53883 and 21409 contracts respectively. No major Put unwinding was seen at strikes ranging from 34500 to 35500 for weekly options expiry of 14 July 2022.
Stock futures long build-up
Stocks like IPCALAB - OI up 21.75%, ABB OI up 14.23% , M&MFIN OI up 13.26%, TATACHEM OI up 10%, INDIACEM OI up 9.47%, HAL OI up 9.38% have witnessed long buildup in July 2022 series where stock prices rose with addition in open interest.
Stock futures short build-up
TORNTPHARMA OI up 115.46%, M&M OI up 10.53%, CUMMINSIND OI up 10.31%, NAVINFLOUR OI up 8.28%, WIPRO OI up 7% have witnessed short buildup in July 2022 series where stock price fell with addition in open interest.
FII DII data
Foreign institutional investors (FIIs) have net sold ₹109.31 crore worth of shares, whereas domestic institutional investors (DIIs) turned net buyers, to the tune of ₹34.61 crore worth of shares on July 6, as per provisional data available on the NSE.
Stocks in F&O ban
National Stock Exchange (NSE) has not added any stock under its F&O ban list for trade date 11 July 2022. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.
US bond yield
US' 10 years bond yield is down by 0.25 per cent at 3.093 whereas US' 30 years bond yield down by 0.38 per cent at 3.257.
Board meetings scheduled today
1] 5Paisa Capital Limited - Financial results/Other business matters;
2] Vaxtex Cotfab Limited - Other business matters;
3] Techno Electric & Engineering Company Limited – Buyback;
4] Spandana Sphoorty Financial Limited - Financial results;
5] Satin Creditcare Network Limited - Fund raising;
6] Rossell India Limited - Other business matters; and
7] Nakoda Group of Industries Limited - Financial results.
Corporate actions today
1] Pix Transmissions Limited - Annual General Meeting/Dividend - ₹6 Per Share;
2] GMM Pfaudler Limited - Bonus 2:1;
3] Control Print Limited - Annual General Meeting/Dividend - ₹5 Per Share;
4] Dr. Reddy's Laboratories Limited - Annual General Meeting/Dividend - ₹30 Per Share;
5] Alps Industries Limited - Annual General Meeting;
6] Persistent Systems Limited - Annual General Meeting/Dividend - ₹11 Per Share; and
7] Palash Securities Limited - Annual General Meeting.
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