Reliance Industries saved the day for the Nifty 50 on Monday. The heavyweight ensured that the index managed to close right at the key support levels and above the flat line. It remains to be seen whether the index will get a similar kind of support in today's session.

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Besides Reliance, it was a forgettable session for the markets on Monday as all other indices barring the Metal index ended in the red. IT stocks were among the top losers ahead of their quarterly earnings starting Wednesday along with Titan, which saw profit booking after hitting a record high on Friday and a brokerage downgrade as well.

"For day traders, a rally is possible only after the 19,435 breakout, above which, the market could rally to 19,500 - 19,525" said Shrikant Chouhan of Kotak Securities. 19,435 happens to be Monday's intraday high. "On the other hand, a fresh sell-off could be seen only below 19,330 levels, below which, the index can fall to 19,250 - 19,200," he said. The Nifty 50 is 25 points above the 19,330 mark.

An inside bar formation on the daily chart of the Nifty 50 shows both bulls and bears lacking conviction at current levels, according to Angel One's Osho Krishnan. He sees downside support at the bullish gap of 19,200 - 19,235, while only a break above the 19,500 - 19,525 levels will bring a fresh rally.

The Nifty Bank index has corrected nearly 500 points over the last two sessions and continues to sustain below the key support level of 45,000. The index has now been forming lower highs and lower lows for the last four sessions. It did cross the 45,000 mark on an intraday basis, but failed to sustain above the same.

"Immediate resistance for the Nifty Bank index is at 45,200," said Kunal Shah of LKP Securities. On the downside, he sees immediate support at 44,80, above which it ended on Monday. "If this support level is breached, it may drag the index towards 44,500 - 44,400," he said, adding that traders should utilise opportunities presented on both sides by the market.

Ashwin Ramani of SAMCO securities has observed the formation of a gravestone doji on Nifty Bank's weekly chart, which indicates a bearish reversal signal. The options activity at the 45,000 strike will provide more cues on the Nifty Bank's direction on Tuesday, he said.

As we mentioned earlier, Reliance Industries saved the day for the Nifty 50 on Monday. It contributed 80 points to the index's upside. The stock ended 4 percent higher on Monday, adding nearly Rs 70,000 crore to its overall market capitalisation. This was also the best single-day jump for the stock since May of last year.

“If you look at what the Reliance stock has done in the past one year, it hasn’t been that exciting. There is no question that demerger will add significant value because whenever there is a demerger there is a better focus. The companies that are coming out of Reliance are not small. So it is clearly a way to play the Indian consumer sector," Anand Tandon, Market Expert told CNBC-TV18.

"So investors should hold on to Reliance, but at current price I would not rush to buy because I think the market is becoming a bit toppish and investors should now be in a cautious mode when looking to invest," he added.

What Do The F&O Cues Indicate?

Nifty 50's July futures shed 1.7 percent or 1.81 lakh shares on Monday. Futures are now trading at a premium of 53.65 points compared to 66.7 points earlier. Nifty Bank's futures also shed 2.8 percent or 76,440 shares in Open Interest. Nifty 50's Put-Call Ratio remains at 0.98 from 0.99 earlier.

Indiabulls Housing Finance, Punjab National Bank and Zee Entertainment have entered the F&O Ban list from today's session, joining BHEL, Delta Corp, Granules India and India Cements, that are already in the list.

Nifty 50 on Call side for July 13 Expiry:

Higher ends of the Nifty 50 call strikes have seen Open Interest shedding for next week's options expiry. The 19,900 strike call has seen the maximum shedding. On the other hand, addition is seen in the 19,700 strike call for next week.

Nifty 50 on Put side for July 13 Expiry:

On the Put side, the 19,350 strike for next week's expiry has seen the maximum Open Interest addition, followed by strikes between 19,150 and 19,250.

Lets look at the stocks which added fresh long positions on Monday, meaning an increase in price and Open Interest:

Lets look at the stocks which added fresh shorts on Monday, meaning a decrease in price but increase in Open Interest:

Lets take a look at stocks that saw unwinding of long positions on Monday, meaning a decrease in both price and Open Interest:

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

Vedanta: Reuters reports that Foxconn is working to remove the Foxconn name from what is a fully-owned entity of Vedanta for the semiconductor joint venture. Vedanta has responded by saying that it remains fully committed to its semiconductor fab project and has lined up other partners to set up India's first foundry. It also said that it will shortly acquire a license for production-grade 28 nm.

LIC: Total premium collected in June up 21 percent at Rs 24,971 crore, compared to 13 percent collected by private life insurers. Individual premium collections flat at Rs 4,295 crore, while June quarter individual premium collection down 4.4 percent at Rs 10,439.2 crore.

Mazagon Dock: Sources tell CNBC-TV18 that the Defence Procurement Board has given initial approval to the proposal to acquire three scorpene submaries. The three additional submarines will be built at Mazagon Docks Ltd., where other submarines of the class have been built.

Gujarat Pipavav: Container volumes in the June quarter up 6.4 percent at 1,99,000 twenty-foot equivalent units.

CarTrade Tech: To acquire 100 percent stake of Sobex from OLX India BV for Rs 537.43 crore.

McLeod Russel: Board approves agreement with Carbon Resources to monetise identified assets. The proposed asset sale will be a one-time settlement of the company's debt to identified lenders.

APL Apollo Tubes: Arm APL Apollo Building Products granted incentives worth Rs 500 crore from SIPB, Chhattisgarh to set up a manufacturing facility.

What Do Global Cues Indicate?

Wall Street snapped a three-day losing streak overnight after Fed officials said that although more rate hikes are warranted, the end to the current monetary policy tightening cycle is getting close.

The Dow Jones gained 0.6 percent overnight, while the S&P 500 and the Nasdaq ended 0.2 percent higher each.

Asian equities are set to follow suit, with the Nikkei 225 set to snap a five-day losing streak, while the Hang Seng looks to extend its gains from Monday.

Both foreign and domestic investors were buyers in the cash market, after institutional selling turned negative on Friday for the first time since June 26.

Rupak De of LKP Securities said that the Nifty 50's Relative Strength Index (RSI) has given a bearish crossover, suggesting a potential shift towards a downward trend. He expects further correction in the index if it slips below the 19,300 mark. Upside resistance is seen between 19,450 - 19,500.

Although Nagaraj Shetti of HDFC Securities expects the Nifty 50 to make another attempt to scale higher levels, he fears a slip below 19,300 can take the index down to key support levels of 19,200 or even 19,000. He expects fresh buying to emerge only after the index decisively crosses the 19,500 mark.

First Published:Jul 11, 2023 5:33 AM IST