Trade setup for Monday: Top 15 things to know before the opening bell
Based on OI %, 64 stocks were short-covered. Bharti Airtel, Axis Bank, Laurus Labs, Torrent Pharmaceuticals, and Jubilant Foodworks. A fall in OI and price increase indicate short-covering.
Money Poise
While the markets' relief rally on August 4 after taking support at 19,300 and rising back above 19,500 was welcome, whether the Nifty can hold 19,500 is the key to further upward into 19,600-19,700 levels. Experts predict that the Nifty will remain in a trading range between 19,300 and 19,100 unless the indicator closes decisively above 19,800.
The BSE Sensex gained 481 points, closing at 65,721, while the Nifty50 rose 135 points, closing at 19,517, and forming a bullish candlestick pattern.
"Last week's low was at 19,296 levels, so a break there would signal a decline to 18,838. Nifty currently stands at a pivotal point in its development. According to Ashish Kyal, CMT, Founder & CEO of Waves Strategy Advisors, any directional move would likely take place after next week's rangebound move between 19,290 & 19,800 levels.
A break of this range, in his opinion, would signal a significant shift in the market. He suggested using a mild Options approach for range bound or consolidation movement during these periods.
The Nifty Midcap 100 and the Nifty Smallcap 100 both rose by 0.8 percent on the back of this optimistic market breadth, indicating strong purchasing activity across the board.
We have collated 15 data points to help you spot profitable trades:
Please take into account that stock open interest (OI) and volume data is an aggregation of data from the prior three months, not simply the current month's data.
Key support and resistance levels on Nifty
According to the pivot point calculator, the Nifty might find initial support at 19,458, then at 19,434 and finally at 19,395. In the event of a price increase, important resistance may be located at 19,537, followed by 19,561 and 19,600.
On August 4, following a three-day correction, the Bank Nifty rebounded and rose 366 points to 44,880, forming a bullish candlestick pattern with higher highs and higher lows on the daily charts. The index gave a decisive close above the 50-day EMA (exponential moving average - 44,650), which is a positive sign; however, the sustainability over the 44,500 mark, which coincides with a horizontal support trendline that acted as a resistance trendline in June, i.e. a change in the concept of polarity, is crucial going forward.
"The bears were active close to the 45,200 level. "A decisive break above this level, especially on a closing basis, could initiate further upward movement, potentially targeting levels near 45,800 or even 46,000," said Kunal Shah, senior technical & derivative analyst at LKP Securities.
On the downside, he believes that a level of support can be identified at 44,500. "Should the index break below this support, bears could regain control, potentially leading to further declines," he explained.
The Bank Nifty is anticipated to find support at 44,611, followed by 44,470 and 44,242. In the event of a price increase, initial resistance is located at 45,068 followed by 45,209 and 45,437.
Nifty options saw the most weekly Call open interest (OI) at the 19,600 strike, with 66.13 lakh contracts. This level may present a significant barrier to upward movement for the index. Following the 20,000 strike, with 60,115,000 contracts, was the 19,700 strike, with 51,565,000 contracts.
Call writing was most active at the 19,600 strike, where an additional 30.08 lakh contracts were written, followed by the 19,900 strike, where an additional 18.29 lakh contracts were written, and finally the 19,800 strike, where an additional 16.3 lakh contracts were written.
The 19,400 strike had the most Call unwinding, with a loss of 28.03 lakh contracts, followed by the 19,300 and 19,500 strikes, which lost 5.21 lakh and 3.59 lakh contracts, respectively.
With 65.21 lakh contracts, the 19,400 strike Put option saw the most open interest. In the upcoming sessions, this may serve as a key support level for the Nifty50.
The next two largest strikes, totaling 55,490,000 contracts, involved 18,500 and 19,500 workers, respectively.
The 19,500 strike saw the most Put writing, with 35.58 lakh contracts added, followed by the 19,400 strike with 21.13 lakh contracts and the 19,100 strike with 19.24 lakh contracts.
Among the major Put unwindings, 95,600 contracts were liquidated at the 18,400 strike, followed by 49,550 contracts at the 18,600 strike and 45,750 contracts at the 18,100 strike.
Stocks with high delivery percentage
Investors appear to be buying the stock as the delivery % is high. A number of stocks showed a significant increase in delivery, including Gujarat Gas, JK Cement, Hindustan Unilever, Godrej Consumer Products, and Alkem Laboratories.
Astral, Lupin, and Astral Healthcare were among the 67 stocks with significant accumulation. When OI and price go up together, it means that more people are taking long positions.
According to the OI %, 14 equities experienced extended unwinding, including Sun Pharmaceutical Industries, Adani Enterprises, Navin Fluorine International, Nestle India, and Granules India. Long unwinding is indicated by falling OI and prices.
Forty-three stocks, including State Bank of India, Cummins India, Aditya Birla Capital, Metropolis Healthcare, and HDFC AMC, saw a buildup of short positions. Rising open interest (OI) and rising short interest (SI) coincide with a decline in price.
There were 64 stocks on the short-covering list based on the OI %. Brands including Bharti Airtel, Axis Bank, Laurus Labs, Torrent Pharmaceuticals, and Jubilant Foodworks were among those that participated. When OI goes down and the price goes up, it's a sign that people are covering their short positions.
Radiant Cash Management Services: At an average price of Rs 105.27 per share, the European financial services firm Societe Generale has sold 19.61 lakh equity shares in Radiant through open market transactions. As of June 2023, Societe Generale owned 2.28 percent, or 24.32 million shares, of the corporation.
PG Foils: In open market transactions, Equity Intelligence India, controlled by ace investor Porinju Veliyath, purchased 1.2 lakh equity shares in the aluminium foils maker at an average price of Rs 241.8 per share. But high-net-worth individual Manish Satyanarayan Nuwal unloaded 1.25 lakh shares at an average price of Rs 244.08 per share, and VICCO Products Bombay unloaded 70,000 shares at an average price of Rs 241.92 per share.
Companies like PB Fintech, Barbeque-Nation Hospitality, Bayer Cropscience, Emami, Eris Lifesciences, Gland Pharma, Godrej Consumer Products, India Cements, Indigo Paints., ITD Cementation India, Krishna Institute of Medical Sciences, Medplus Health Services, Olectra Greentech, Paras Defence and Space Technologies, Ramco Cements, Ramco Systems, RateGain Travel Technologies, Sobha, Sun Pharma Advanced Research Company, Tata Chemicals
Stocks in the news
Britannia Industries: The bakery foods industry saw a 35.65 percent increase in quarterly profit to Rs 455.45 crore on the strength of strong operating results for the quarter ending June FY24. This quarter's operating revenue of Rs 4,010.7 crore is an increase of 8.4 percent year over year.
Delhivery: The logistics firm saw a considerable decrease in its net loss for the quarter ending June FY24, from Rs 399.3 crore a year earlier to Rs 89.5 crore. There was a year-over-year increase of 10.5% in consolidated revenue from operations, which resulted in Rs 1,930 crore in earnings for the quarter.
Biocon: Biocon Biologics, a subsidiary of Biocon, has announced several major executive appointments. While Sandeep Athalye has been promoted to Chief Development Officer to oversee CMC, Clinical Development, and Medical and Regulatory Affairs, Rhonda Duffy has been named Chief Operating Officer. Athalye served as the Chief Medical Officer for Biocon Biologics.
Delta Corp: The casino gaming corporation announced Hardik Dhebar's resignation from his position as Chief Financial Officer effective August 4. The board of directors and the executive staff will select a new candidate for the open post.
Oil India: Oil India was promoted by the Indian government to the Maharatna level. The country now has a total of 13 Maharatna CPSEs.
CE Info Systems: For the June quarter of FY24, the company that specialises in cutting-edge digital mapping and technology declared a profit of Rs 32 crore, up 32.2% year-over-year, despite a year-over-year decline in PAT margin of 120 basis points to 32.7%. Q1FY24 operating revenue of Rs 89.4 crore was up 37.5% year-over-year.
Bank of Baroda: Despite increased provisions, the public sector lender had an enormous 87.7 percent YoY growth in profit at Rs 4,070.1 crore for the quarter ended June FY24. This was underpinned by solid operational income growth of 42.9% YoY. The quarter's net interest income of Rs 10,997 crore was up 24% year-over-year.
ICICI Bank: The Reserve Bank of India has granted the second-largest private sector lender in the country permission to grow its investment in ICICI Lombard General Insurance Company in successive tranches up to 4 percent.
Fund Flow
On August 4, provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) sold shares worth Rs 556.32 crore while domestic institutional investors (DII) acquired shares worth Rs 366.61 crore.
Stocks under F&O ban on NSE
For August 7, The NSE will restrict trading in shares of Indiabulls Housing Finance together with shares of Gujarat Narmada Valley Fertilisers & Chemicals (GNFC), Hindustan Copper, and Piramal Enterprises. Companies whose derivative contract exposure is greater than 95% of the market limit are prohibited from trading in the F&O segment.
Disclaimer: The views and investment tips expressed by experts on Moneypoise are their own and not those of the website or its management. Moneypoise advises users to check with certified experts before taking any investment decisions.
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