The first half of 2023 has seen the Nifty 50 gain 5.5 percent. The index scaled record high levels on the last day of the June series and the first day of the July one. Not only has it sustained above the mark of 19,000, it registered its best single-day gain in two months on Friday. The index has gained over 500 points during the last four trading sessions.

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Last week also turned out to be the best one since July last year for the Nifty 50, when the index had gained over 4 percent. Nearly 86 percent of the Nifty 50 constituents are now trading above their 200-Day Moving Average, according to Nuvama Alternative and Quantitative Research.

With new highs now in place, the focus has shifted to the quarterly earnings season, which will determine whether this rally will sustain going forward. For Monday's session, Auto stocks will react to the already reported sales numbers over the weekend.

To know more about where are the Nifty 50 and Nifty Bank headed this July series, read this piece from Gaurav Bissa of InCred Equities, who also shares his two stock picks for the series.

"For the bulls, 19,050 and 19,000 will act as key support levels on the downside, according to Amol Athawale of Kotak Securities. "A breakout continuation formation on daily charts and a long bullish candle on the weekly charts supports further upside for the Nifty 50," he said. However, he added that traders may prefer to exit long positions below levels of 19,000.

"The good part about the market at these all-time highs is that the valuations are still reasonable," Dinshaw Irani of Helios Capital India said. "That gives the comfort that we are not in a in a zone which is flashing red lines," he added.

Another factor from which the Nifty 50 can take heart from is that financials have finally begun to participate in the rally, which has spurred further upside for the index. 44,500 has been a long-standing resistance for the Nifty Bank index, which it finally breached on Friday and also sustained above the same. The banking index has gained 1,100 points over the last four trading sessions.

Nifty Bank's Relative Strength Index also indicates strong momentum and bullish sentiment for the index, said Rupak De of LKP Securities. The index has also given a downward consolidation breakout on the charts. However, De sees resistance at levels of 45,000 where high Open Interest on the Call side is visible.

Kotak Securities' Athawale said that as long as the index is trading above the 44,300 mark, the breakout can take it higher towards levels of 45,000 or even 45,300 on the upside.

A big casualty during Friday's trading session was MCX. which ended 9 percent lower after an intraday drop of as much as 12 percent. The stock fell after it renewed its software support service contract with 63 Moons at a much higher price compared to what was paid earlier. You can read more about it here.

“MCX and other market infrastructure companies are definitely good bet from a portfolio point of view for long term investors. So whether it is CDSL or BSE or MCX, it should be a good bet. Indian market is growing by leaps and bounds, the volume of trading is increasing in all the segments of the market. So from a long term point of view MCX is definitely a worthwhile pick,” Sudip Bandopadhyay of Inditrade Capital told CNBC-TV18 on Friday.

What Are The F&O Cues Indicating?

Nifty 50's July futures added 9.6 percent or 8.8 lakh shares in Open Interest on Friday, while the Nifty Bank futures added 13.9 percent or 3.1 lakh shares in Open Interest. Nifty 50's put-call ratio is now at 1.58 from 1.4 earlier.

Indiabulls Housing Finance has already entered the F&O Ban list from Monday's session.

Nifty 50 On the Call side for July 6 expiry:

For this Thursday's weekly options expiry, the Nifty 50 call strikes between 19,200 - 19,400 have seen addition in Open Interest, while the 19,000 strike has seen Open Interest shedding.

Nifty 50 on the Put side for July 6 expiry:

Nifty 50's put strikes between 19,000 and 19,200 have seen addition in Open Interest, with the 19,100 strike seeing the highest addition.

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

Here are some stocks that added fresh short positions on Friday, meaning a decrease in price but increase in Open Interest:

Friday's session also saw short-covering in some stocks, which is an increase in price but decline in Open Interest:

Here's how the Auto sales for the month of June have panned out:

Maruti Suzuki India: Overall sales in June up 2.3 percent to 1.59 lakh units. Total passenger vehicle sales up 8.4 percent to 1.33 lakh units, while exports drop 17 percent to 19,770 units.

Hero MotoCorp: Overall sales in June down 10 percent to 4.36 lakh units. Domestic sales down 8.7 percent to 4.22 lakh units, while exports down 34 percent to 14.236 units in June. To also increase ex-showroom prices of its motorcycles and scooters from July 3 at an average price of 1.5 percent which will vary across models.

Tata Motors: Total domestic sales in June down 2 percent to 80,383 units. Total commercial vehicle sales down 15 percent year-on-year. HCV trucks and passenger carriers are the only two segments, where sales rose by 9 percent and 11 percent in June.

Eicher Motors: Overall Royal Enfield June sales up 26 percent to 77,109 units. Exports down 14 percent to 9,614 units.

Escorts Kubota: Overall June sales down 2 percent year-on-year to 9,850 units. Domestic sales flat while exports drop 26.2 percent to 580 units.

Besides auto stocks, here are some other key stocks to watch out for ahead of Monday's session:

HDFC: Demand for home loans remains strong. Of the individual home loans disbursed during the quarter, 77 percent were salaried customers and 23 percent were self-employed. Housing Loans constituted 93 percent of the individual loans disbursed. Additionally, merger with HDFC Bank effective from July 1. Record date for swap ratio is July 13.

Reliance Industries: RIL and British Petroleum commence commercial production from third deepwater field in India's KG D6 block.

Coal India: Production in June quarter up 10 percent year-on-year to 175.5 MT, the highest ever during the first quarter of any year. That is nearly 22.5 percent of its overall production target of 780 MT for financial year 2024. Supplies during the quarter up 5 percent to 187 MT.

Aditya Birla Capital: Successfully completes fund raising of Rs 3,000 crore. Raises Rs 1,750 crore through QIP at an issue price of Rs 175 per share. BlackRock, Capital Group, Norges Bank, MIT, ADIA, SBI Life among key participants in QIP.

NMDC: Best ever production and sales in June and April-June quarter. Production for the June month grew by 35 percent month-on-month. Sales in June more than doubled, rising 115 percent from May. Production and sales for the quarter increased by 20 percent and 45 percent respectively from last year.

Mazagon Dock Shipbuilders: Signs contract with Indian Navy for Medium Refit cum Life Certification of second Sishumar class submarine INS SHANKUSH worth Rs 2,724.63 crore.

Vedanta: Initiates strategic review of steel and steel raw materials businesses, appoints advisors for the same.

What Are Global Cues Indicating?

US equities on Wall Street capped off a stellar start of the year. The Dow Jones gained 285 points, while the S&P 500 gained 1.2 percent. The Nasdaq advanced 1.4 percent to cap off its best first half of a calendar year since 1983.

Mega-cap technology stocks responsible for a sizeable chunk of 2023′s market gains rose Friday. Dominant artificial intelligence chipmaker Nvidia jumped 3.6 percent on Friday, bringing its yearly gains to more than 189 percent.

Both foreign and domestic investors were net buyers in the cash market on Friday. However, the numbers will be skewed yet again due to a slew of block deals that have taken place during the session, including those in Adani Transmission, CreditAccess Grameen, and TD Power, among others.

Nagaraj Shetti of HDFC Securities believes that the near-term trend of the Nifty 50 remains intact and that he expects the index to scale levels of 19,500 in the coming week. Immediate support on the downside is seen at levels of 19,050.

LKP's Rupak De believes that the Nifty 50 has potential to move towards levels of 19,450 in the short term, indicating further upward movement. On the downside, there is support at 19,000 for the index and the bullish momentum will continue as long as it remains above those levels.

First Published:Jul 2, 2023 3:04 PM IST