The date for the Nifty 50 to cross 20,000 will have to wait as the index snapped a six-day winning streak on Friday. Heavyweights like Reliance Industries and Infosys, along with other IT stocks put pressure on the downside on Friday. Although the index had its biggest single-day drop in four months, it managed to find support at the 19,700 mark.

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That 19,700 will emerge as a crucial level to watch out for as the July series expiry takes place this week. Before Friday's drop, the Nifty 50 was up over 1,000 points in the July series. However, it is still on course for its fourth successive F&O series gain. In case that happens, it will be the first instance since December 2016 - May 2017, when the index has had four consecutive positive F&O series.

Nagaraj Shetti of HDFC Securities said that a small negative candle was formed on the Nifty 50's daily chart, which indicates a short-term top reversal pattern. But he needs follow-through weakness to call it a downward reversal pattern. According to Shetti, the Nifty 50 has stiff resistance at the 20,000 mark.

"The immediate support of 10-day Exponential Moving Average at 19,650 levels and important 20-Day Exponential Moving Average support is at 19,425. Hence, there is a possibility of an upside bounce from those levels," he said. On the upside, 19,850 - 19,900 can act as an immediate hurdle.

The Nifty Bank cooled off from the day's high on Friday and ended lower as well. But the index outperformed the benchmark index and also managed to close above the 46,000 mark. All lot of the Nifty Bank's reaction on Monday will depend on how the index constituents like ICICI Bank, Kotak Mahindra Bank and RBL Bank react to their respective quarterly results.

For the July series, the Nifty Bank is up nearly 1,700 points. This would also be the fourth consecutive positive F&O series for the index. The last instance of this happening was between October 2017 - January 2018.

Nifty Bank's options data suggests that the index may remain rangebound as there is significant options selling observed on at-the-money strikes, said Kunal Shah of LKP Securities. Downside support for the index is seen at 45,900, which also happens to be Friday's low, while upside resistance for the index is seen at 46,350 - 46,400 levels.

The stock to watch out for today will be Reliance Industries as it will be reacting to its quarterly results reported after market hours on Friday. It will be the reaction seen in Reliance that may determine the Nifty 50 trajectory going forward. For the quarter, strong contribution from the consumer, upstream business, offset the decline in the O2C business. However, the company's Global Depository Receipt (GDR) ended nearly 6 percent lower on Friday.

"I have been positive on Reliance for some time and I have been maintaining my view that the value unlocking opportunity inside Reliance Industries is humongous. We have just seen the Jio Financial segregation happening but the big deal for the investors will be when Jio Platforms and the retail gets segregated and at some point of time maybe even the green energy business also will get separated. So these will be huge value unlocking opportunities. So as far as I am concerned for a long term investor he should definitely have Reliance in his portfolio," Sudip Bandyopadhyay of Inditrade Capital told CNBC-TV18.

What Are The F&O Cues Indicating?

Nifty 50's July futures shed 7.5 percent or 8.09 lakh shares in Open Interest on Friday. They are now trading at a premium of 31.4 points compared to a discount of 8.95 points earlier. On the other hand, Nifty Bank's July futures shed 6.8 percent or 1.54 lakh shares in Open Interest. Nifty 50's Put-Call Ratio is at 0.91 from 1.44 earlier.

RBL Bank is out of the F&O ban list from today's session, while PNB, Balrampur Chini, L&T Finance Holdings, Manappuram Finance, Indiabulls Housing Finance and Delta Corp continue to remain in the ban period.

Nifty 50 on the Call side for July 27 expiry:

For this Thursday's weekly and monthly options expiry, the Nifty 50 Call strikes between 19,800 and 19,900 saw addition in Open Interest, with the 19,900 strike Call seeing the maximum Open Interest addition.

Nifty 50 on the Call side for July 27 expiry:

On the Put side, strikes between 19,600 and 19,750 have seen addition in Open Interest. The 19,650 put has seen the maximum Open Interest addition for this Thursday's expiry.

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

Lets take a look at the stocks which saw long unwinding on Friday, which means a decline in both price and Open Interest:

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

Reliance Industries: Strong contribution from consumer, upstream business offsets decline in O2C. Reliance Retail reported its highest-ever revenue, EBITDA and margin. Jio Platforms' APRU stood at Rs 180.5 from Rs 175.7 last year. The company has also approved a dividend of Rs 9 per share.

ICICI Bank: Business momentum remains strong during the June quarter. Deposit growth best in nine quarters. Return on Assets (RoA) at 2.39 percent are the highest ever. Gross and Net NPA are at an eight-year low. Net Interest Income and Net Profit were higher than the CNBC-TV18 poll.

Kotak Mahindra Bank: Deposit growth of 22 percent year-on-year is the best in 16 quarters. Net Interest Margin at 5.57 percent declines sequentially but remains the highest among large banks. NII in-line with the CNBC-TV18 poll, while net profit was ahead of expectations.

Paytm: Net loss widens sequentially to Rs 358.4 crore, while total income remains flat. EBITDA of Rs 359 crore from EBITDA loss of Rs 275 crore year-on-year and up 53.4 percent sequentially. GMV up 35 percent year-on-year. Average monthly users up 23 percent year-on-year to 9.2 crore.

Yes Bank: Weak loan growth leads to weakest NII growth in nine quarters, while slippage ratio is the highest in seven quarters. Gross NPA at 2 percent from 2.17 percent sequentially, while Net NPA at 1 percent from 0.83 percent sequentially.

DLF: Sales driven by existing projects, no major launches in the June quarter. Booking trend normalises after stellar March quarter. Company re-enters the Mumbai market with net debt at the lowest level in many years.

Vedanta: Net profit for the June quarter fell to Rs 2,640 crore from Rs 4,421 crore during the same period last year. The drop in net profit comes despite an exceptional gain of Rs 1,780 crore. As of the June quarter, the company's net debt stood at Rs 59,192 crore from Rs 45,260 crore in the March quarter and Rs 26,799 crore during the June quarter last year.

What Do The Global Cues Indicate?

Asian markets have opened mixed this morning ahead of a slew of economic data from various parts of the region.

The Nikkei 225 is up close to a percent, while the Topix has risen 0.6 percent. Japan will also be releasing its private surveys for purchasing managers index in July.

On the other hand, the Kospi in South Korea is down 0.4 percent, while the Kosdaq is down over 1.1 percent, retreating further from its 16-month highs it scaled last week. Hang Seng futures are pointing to a weak start.

US markets were mixed on Friday as traders continue to assess the latest round of corporate earnings. The Dow Jones barely managed to eke out a 2.5 point gain, extending its winning streak to the 10th straight session.

This is the longest winning streak for the 30-stock index since August 2017. The S&P 500 added 0.7 percent for the week, while the Dow rose by 2.1 percent. The Nasdaq reported a weekly drop of 0.6 percent.

All eyes this week will be on the US Federal Reserve, as it holds its policy meeting starting July 25. As per the CME Fed Watch tool, traders are pricing in a 99.2 percent probability of the Federal Reserve hiking interest rates by 25 basis points this week.

Foreign investors were net sellers in the cash market on Friday, the first sell number in many sessions, while Domestic investors were net buyers.

The Nifty 50 has a crucial support at the 19,700 level as it has significant put writing, while the upside resistance is seen at the 20,000 mark, said Rupak De of LKP Securities. Should the index fall below 19,700, it may lead to a substantial correction, he said.

First Published:Jul 23, 2023 2:29 PM IST