The Nifty 50 has been in correction mode over the last two weeks. The previous instance of the index falling for back-to-back weeks was back in March this year. That shows the extent of the bull run India's equity markets have had from their March lows.

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Despite the correction last week, the Nifty 50 respected its previous swing low of 19,303, which it made on July 7. Although it did slip below that mark for a brief period, it did not close below it. Friday's bounce also ensured the Nifty 50 closed above its recent support level of 19,500.

However, while the index has closed above 19,500, it is not out of the woods just yet. It still has to surpass a key trading range to ensure that Friday's reversal is not just a dead-cat bounce, but a sustained upmove back towards the 20,000 mark.

Sameet Chavan of Angel One said that the Nifty 50 closed below its 20-Day Exponential Moving Average for the first time since March 31. He advises avoiding any aggressive trades until the index surpasses and closes above the 19,550 - 19,600 range on a closing basis. In case the index does head back towards 19,400 - 19,300, it may ignite further selling pressure towards 19,000 - 18,800.

The recent fall has pushed the Nifty 50 below the 21-Day Exponential Moving average for the first time since March 29, said Rupak De of LKP Securities, He expects 19,566 on the upside to act as a crucial resistance, above which, the index can move back towards 19,700 - 19,750. However, if it fails to sustain above 19,566, the selling pressure may resume.

The Nifty Bank also snapped a three-day losing streak on Friday but was not enough to prevent a weekly loss. The index has now declined in three out of the last four weeks and continues to face resistance at the 45,000 mark and has now closed below it for three sessions in a row.

Kunal Shah of LKP Securities said that the Nifty Bank needs to sustain above the 45,200 mark for further upward movement till around 45,800 or even 46,000. Till then, the index is trading in a broad range of 44,500 - 45,200. In case the banking index breaks below the 44,500 mark, it may trigger further selling pressure towards lower levels.

The stock of the day on Friday was Zomato as the company delivered its first ever quarterly profit. Here are five charts that explain its journey to profitability. The stock ended 10 percent higher on Friday, marking its biggest single-day surge in over a year. It is also nearing the mark of Rs 100 per share, which if it does cross, would be the first instance since March 2022.

"It augurs well for what the company intends to do and what it hopes to. But do I go and buy into the stock? The point is if you're asking me at the present level, can I make a 10-20 percent return on the stock? The answer could be yes. So as a stock from a shorter term angle, the answer is yes," Market expert Mehraboon Irani said.

"The stock can certainly go up but it still doesn't fit into the parameters, which I look at while recommending the stock certainly on a mass media and certainly on a powerful channel like CNBC-TV18. So from an investment angle, I would still like to stay away from it while stating that the stock certainly has room for upside in the short term," he added.

What Are The F&O Cues Indicating?

Nifty 50's August futures added 3.7 percent or 4.07 lakh shares in Open Interest. They are now trading at a premium of 59.35 points from 86.5 points earlier. On the other hand, Nifty Bank's August futures have shed 3 percent or 54,165 shares in Open Interest. Nifty 50's Put-Call Ratio is back above 1 at 1.04 from 0.93 earlier.

Indiabulls Housing Finance is back in the F&O Ban list from today's session, while Piramal Enterprises, Hindustan Copper and GNFC continue to remain in the list.

Nifty 50 on the Call side for August 10 expiry:

For this Thursday's expiry, the Nifty 50 call strikes between 19,550 and 19,700 have seen significant Open Interest addition. The 19,600 Call strike has seen the highest Open Interest addition.

Nifty 50 on the Put side for August 10 expiry:

On the Put side, strikes between 19,400 and 19,500 have seen Open Interest addition, indicating that the bulls are looking to defend the 19,500 mark on the downside after Friday's move.

Lets take a look at the stocks that saw fresh long positions on Friday, which means an increase in both price and Open Interest:

Lets take a look at the stocks which saw fresh short positions on Friday, which means an increase in Open Interest but decrease in price:

Some stocks also saw short covering on Friday, meaning an increase in price but decrease in Open Interest:

Here are the stocks to watch out for ahead of Monday's trading session:

Reliance Industries: To hold Annual General Meeting on August 28. Resolution to alter MoA objects to allow business in all areas of integrated renewable energy power projects.

Britannia: Volume growth flat compared to CNBC-TV18 poll of 4-5 percent. Net profit misses expectations, as does operating profit. EBITDA margin at 17.2 percent is 100 basis points below estimates.

State Bank of India: Chairman Dinesh Kumar Khara tells CNBC-TV18 that bulk of the stress in the quarter came from the agriculture and SME book. Expect only about Rs 500 crore worth of SMA 1 & 2 book to come under stress. He further expects credit costs to be under 0.5 percent for the full fiscal.

Bank of Baroda: Net Interest Income and Net Profit both miss street expectations. Asset quality is best in more than eight years. Bank is targeting Rs 12,000 crore of recovery or upgrades for financial year 2024. Growth guidance of 100-200 bps higher than industry and retail growth of 400-500 bps higher than industry unchanged.

Balkrishna Industries: June quarter revenue impacted due to production disruption on account of cyclone Biparjoy. Guidance is cautious as company says challenges in September quarter due to recessionary fears in the export market and heat waves. Volumes decline by 19 percent from last year.

Delhivery: Net loss narrows to Rs 89.4 crore from Rs 399.3 crore year-on-year. Revenue up 10.5 percent to Rs 1,929.7 crore from Rs 1,745.7 crore last year.

Balrampur Chini: Sugar segment is profitable. Good growth in distillery segment but margins decline. Lower margin in distillery business owing to higher transfer pricing of feed stock. Net profit rises to Rs 73 crore from Rs 12 crore.

Aurobindo Pharma: Arm Eugia Pharma Specialities receives USFDA approval for Vancomycin Hydrochloride injection used in the treatment of certain serious infections.

Fortis Healthcare: Steady quarter with revenue up 11 percent and margin maintained at 16.4 percent. The company will also begin the process of the IPO for Agilus Diagnostics, which will be through an Offer for Sale. It also divested its hospital business at Vadapalani in Chennai to enhance its focus on key strategic clusters.

Cipla: Pithampur unit in Indore gets OAI status from USFDA. Plant was inspected between February 6-17, 2023. OAI issued as establishment has not met regulatory requirements.

What Are Global Cues Indicating?

Asian equities have opened lower as investors are looking forward to economic data from China and trade balance later this week.

The Nikkei 225 is down 1 percent in the first hour of trade, while the Topix is down 0.5 percent. South Korean Kospi is flat, while Kosdaq is down by 0.8 percent. Hang Seng futures are also pointing towards a weak opening.

US markets ended lower on Friday despite some positive earnings and stock reaction from stocks like Amazon. Profit booking continued after the recent rally.

The Dow Jones ended 150 points lower, while the S&P 500 and the Nasdaq fell 0.5 percent and 0.4 percent respectively. The S&P 500 and the Nasdaq fell for the fourth day in a row to notch their worst weekly performance since March.

Foreign investors continued to remain sellers in the cash market on Friday, while domestic investors were buying at lower levels.

88 percent of the Nifty 50 constituents are now trading higher then their 200-Day Moving Average, compared to their previous two-week average of 90 percent, according to Nuvama Alternative and Quantitative Research.

Nagaraj Shetti of HDFC Securities said that the short-term trend of the Nifty 50 remains negative and that the present upmove could encounter strong resistance around levels of 19,600 - 19,650. Immediate support on the downside is seen at levels of 19,400.

First Published:Aug 6, 2023 3:47 PM IST