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Trade Setup for Monday: Top 15 things to know before Opening Bell

Nagaraj Shetti of HDFC Securities said the short term trend of Nifty is weak, with the next lower levels to be watched around 11,425 for the next few sessions

July 14, 2019 / 07:02 PM IST
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The market is caught in a bear trap and fell to a nearly two-month low in the week ended July 12, dragged by selling across sectors except healthcare, which gained 1.6 percent.

The BSE Sensex was down 777.16 points or 1.97 percent at 38,736.23, while the Nifty50 fell 263.45 points or 2.23 percent to close below psychological 11,600 levels at 11,547.70, forming a bearish candle on the weekly charts.

For July 12, the index lost a third of a percent and formed a bearish candle, which resembles the Bearish Engulfing Pattern on the daily charts.

A Bearish Engulfing Pattern consists of two candles. One candle is usually a small candle, which is followed by a large black or red candlestick pattern that engulfs the short one or the previous candle.

"Nifty has formed a Bearish Engulfing Candle on the daily chart. A higher time frame i.e. the weekly chart, shows that the week was dominated by the bears resulting in a breach of 20-week moving average, which is a crucial medium-term moving average. So the crux of the argument is that the bears are occupying a dominant position and are expected to drive the Nifty down going ahead," Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas told Moneycontrol.

He said on the downside, 11,500 and 11,461, will be the initial levels to watch out for with potential to head further down.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities also said a negative candle formed on July 11 on the daily chart with a long upper shadow indicates a lack of strength in the market to sustain above the hurdle of around 11,625-11,650 levels (resistance as per the concept of change in polarity).

Hence the short term trend of the Nifty is weak, with the next lower levels to be watched are around 11,425 in the next few sessions, he added.

The broader markets also traded in line with benchmarks as the BSE Smallcap index fell 2.58 percent and Midcap index was down 1.17 percent.

We have collated 15 data points to help you spot profitable trades:

Key support and resistance level for Nifty

The Nifty closed at 11,552.50 on July 12. According to the pivot charts, the key support level is placed at 11,514.23, followed by 11,475.97. If the index starts moving upward, the key resistance levels to watch out are 11,615.13 and 11,677.77.

Nifty Bank

The Nifty bank closed at 30,601.45, down 115.10 points on July 12. The important pivot level, which will act as crucial support for the index, is placed at 30,476.17, followed by 30,350.93. On the upside, key resistance levels are placed at 30,798.77, followed by 30,996.13.

Call options data

Maximum Call open interest (OI) of 32.09 lakh contracts was seen at the 12,000 strike price. It will act as a crucial resistance level for the July series.

This is followed by 11,800 strike price, which now holds 16.98 lakh contracts in open interest, and 11,700, which has accumulated 16.97 lakh contracts in open interest.

Significant Call writing was seen at the 11,700 strike price, which added 2.82 lakh contracts, followed by an 11,600 strike price, which added 2.35 lakh contracts.

Call unwinding was seen at 12,200 strike, which shed 1.87 lakh contracts, followed by 11,900 strike, which shed 1.21 lakh contracts and 12,100 strike, which shed 0.65 lakh contracts.

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Put options data

Maximum Put open interest of 19.88 lakh contracts was seen at 11,300 strike price. It will act as a crucial support level for the July series.

This was followed by a 11,500 strike price, which now holds 17.67 lakh contracts in open interest and 11,000 strike price, which has now accumulated 16.76 lakh contracts in open interest.

Put writing was seen at 11,400 strike price, which added 1.94 lakh contracts, followed by 11,600 and 11,500 strikes, which added 0.56 lakh contracts each.

Put unwinding was seen at the 11,300 strike price, which shed 1.56 lakh contracts, followed by 11,800 and 10,900 strike prices that shed 0.96 lakh contracts each.

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Stocks with a high delivery percentage

High delivery percentage suggests that investors are accepting the delivery of the stock, which means that investors are bullish on it.

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39 stocks saw a long buildup

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47 stocks that saw short covering

A decrease in open interest, along with an increase in price, mostly indicates short covering.

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48 stocks saw a short build-up

An increase in open interest, along with a decrease in price, mostly indicates a build-up of short positions.

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28 stocks saw long unwinding

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Analyst or Board Meetings/Briefings

Plastiblends India: The company will announce its June quarter earnings on July 26.

Blue Dart Express: The company will announce its June quarter earnings on July 31.

Emmbi Industries: The company's officials will meet JHP Securities on July 15.

Sterlite Technologies: An earnings call will be held on July 18 to discuss the company's results and performance for quarter ended June 2019.

Tube Investments Of India: The company will announce its June quarter earnings on July 24.

InterGlobe Aviation: The company will announce its June quarter earnings on July 19.

MOIL: The company will announce its June quarter earnings on July 27.

Kokuyo Camlin: The company will announce its June quarter earnings on August 8.

MCX: A conference call for investors and analysts will be held on July 17 with respect to the financial results for the quarter ended June 2019.

Bharat Wire Ropes: The board of Directors has decided to call the 33rd Annual General Meeting on August 14.

Stocks in news

Results on July 15: Tinplate Company of India, Tata Metaliks, Automotive Stampings, Bajaj Consumer Care.

Infosys Q1: Consolidated profit falls 6.8 percent to Rs 3,802 crore versus Rs 4,078 crore. Dollar revenue rises 2.3 percent to $3,131 million versus $3,060 million QoQ. Company raises FY20 constant currency growth guidance to 8.5-10 percent from 7.5-9.5 percent and maintains FY20 EBIT margin guidance at 21-23 percent.

3i Infotech Q1: Profit falls to Rs 1.98 crore versus Rs 34.89 crore and revenue dips to Rs 280.12 crore versus Rs 299.60 crore QoQ.

Salasar Techno Engineering: Brickwork Ratings India assigned A- rating for long term borrowing and A2+ rating for short term borrowing.

Parag Milk Foods: ICRA upgraded credit rating for Rs 390.04 crore (enhanced from Rs 388 crore) Line of Credit to A+ with stable outlook from A.

InterGlobe Aviation: IndiGo confirms receiving 4 show cause notices from Directorate General of Civil Aviation to flight operations and safety departments

Grindwell Norton: Company has executed a definitive agreement with Shinagawa Refractories, Japan to form a private limited company for tap hole clay refractory products for the steel industry. Company will hold 49 percent and Shinagawa 51 percent stake in the private limited company.

Reliance Industrial Infrastructure Q1: Profit at Rs 1.7 crore versus Rs 1.9 crore; revenue at Rs 20.37 crore versus Rs 21.20 crore YoY.

ITC: The company has appointed Ajit Kumar Seth and Anand Nayak as additional directors.

Ajanta Soya: CRISIL assigned long term rating at BB+ with stable outlook and short term rating at A4+.

DB Realty: Promoter Neelkamal Tower Construction LLP  pledged an additional 5 lakh shares in favour of Anand Rathi Global Finance on July 8.

Gloster: National Company Law Tribunal approved the resolution plan submitted by the company for the acquisition of Network Industries under the Corporate Insolvency Resolution Process of the Insolvency and Bankruptcy Code.

Bulk deals

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(For more bulk deals, click here)

FII & DII data

Foreign Institutional Investors (FIIs) sold shares worth Rs 850.11 crore, but Domestic Institutional Investors (DIIs) bought Rs 940.12 crore worth of shares in the Indian equity market on July 12, as per provisional data available on the NSE.

Fund Flow Picture

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Four stocks under F&O ban period on NSE

For July 15, DHFL, IDBI Bank, Reliance Capital and Reliance Infrastructure are under the F&O ban period.

Securities in ban period under the F&O segment include companies in which security has crossed 95 percent of the market-wide position limit.

Sunil Shankar Matkar
first published: Jul 14, 2019 07:02 pm

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