By CNBCTV18.com IST (Published)
Mini
Trade setup for Friday, July 1: The Nifty50 could be headed higher as long as it holds key support at 15,600, say experts. Here's what the technical charts suggest.
Indian equity benchmarks finished a choppy session flat on Thursday, as gains in select financial stocks were offset by losses in IT, metal and auto counters. Weakness across global markets dented the sentiment on Dalal Street, after data showed the US economy contracted in the quarter ended March.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a small body candle on the daily chart with upper and lower shadows, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
He views the absence of sharp weakness near 15,800 as favourable to the bulls. However, a decisive move below 15,600 is likely to negate the bullish bet and could result in sharp weakness down to 15,200, Shetti warned.
Traders on the back foot
The undertone of the market remains bearish due to weak global cues and persistent foreign fund outflows, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
"There is so much uncertainty that traders don't want to risk placing huge bullish bets," he said.
Here are key things to know about the market ahead of the July 1 session:
Global markets
Equities in other Asian markets began the day mildly in the red following yet another weak session on Wall Street overnight. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.3 percent at the last count.
Japan's Nikkei 225 was down 0.6 percent and China's Shanghai Composite 0.5 percent. The Hong Kong market was shut for a holiday.
S&P 500 futures were down 0.2 percent. On Thursday, the three main US indices fell after data showed consumer spending in the world's largest economy rose moderately in May. The S&P 500 dropped 0.9 percent, the Dow Jones 0.8 percent and the Nasdaq Composite 1.3 percent.
What to expect on Dalal Street
The Nifty50 has been caught within a 300-point trading range of 15,650-15,950 and refusing to decline in tandem with global markets, independent technical analyst Manish Shah pointed out.
"The narrative in the market has changed. The index opens lower and sees a recovery towards the close. A series of green candles holding above the support level of 15,650 means that buyers are trying to get a foothold," he said.
He believes the Nifty has a high probability of rallying to 16,200-16,300 as long as it holds the support zone of 15,600. "Traders should be cautioned that a slide below 15,600 would mean it could revisit its June 2022 low of 15,250," he said.
Important levels to track
The Nifty50 remains about eight percent below its long-term simple moving average.
| Period (No. of sessions) | Simple moving average | |
| Nifty50 | Sensex | |
| 5 | 15,792.2 | 33,555.2 |
| 10 | 15,621.3 | 33,237.6 |
| 20 | 15,868.9 | 33,757.3 |
| 50 | 16,246.5 | 34,523.6 |
| 100 | 16,689.5 | 35,544.3 |
| 200 | 17,168.3 | 36,612.2 |
Chouhan sees key support for the 50-scrip index at 15,700, below which, the decline could continue all the way to 15,600-15,550 levels.
The level of 15,900 would act as important resistance, only a breakout above which will lead to the possibility of a fresh uptrend up to the 16,000-16,050 zone, he said.
FII/DII activity
Call/put open interest
The maximum call open interest is accumulated at the strike price of 16,000, with two lakh contracts, and the next highest at 16,100, with 1.5 lakh contracts, according to exchange data. The maximum put open interest is at 15,400 and 15,750, with 1.5 lakh contracts each.
This suggests strong resistance at 16,000 and strong support at 15,400.
Long build-up
Here are five stocks that saw an increase in open interest as well as price:
| Stock | Current OI | CMP | Price change | OI change |
| ICICIPRULI | 1,517,250 | 483.4 | 0.42% | 47.80% |
| NAUKRI | 233,750 | 3,798.05 | 0.94% | 47.22% |
| ICICIGI | 1,041,675 | 1,117.35 | 0.64% | 46.67% |
| HDFCLIFE | 3,366,000 | 548.7 | 1.25% | 42.32% |
| BRITANNIA | 307,200 | 3,441 | 0.86% | 32.23% |
Long unwinding
| Stock | Current OI | CMP | Price change | OI change |
| ASTRAL | 106,425 | 1,642.15 | -1.31% | -57.11% |
| SYNGENE | 273,700 | 548.1 | -2.35% | -55.28% |
| RBLBANK | 13,824,300 | 83.3 | -1.30% | -48.00% |
| NAVINFLUOR | 83,925 | 3,636.20 | -2.67% | -46.11% |
| BSOFT | 919,100 | 354.45 | -4.60% | -42.57% |
(Decrease in open interest as well as price)
Short covering
| Stock | Current OI | CMP | Price change | OI change |
| CUMMINSIND | 227,400 | 1,027.05 | 0.97% | -59.37% |
| UBL | 193,900 | 1,439.60 | 0.29% | -50.18% |
| ALKEM | 87,600 | 3,031.65 | 1.91% | -45.89% |
| IPCALAB | 224,100 | 898.75 | 0.21% | -41.16% |
| HDFCAMC | 820,200 | 1,790 | 2.66% | -32.58% |
(Increase in price and decrease in open interest)
Short build-up
| Stock | Current OI | CMP | Price change | OI change |
| HDFC | 5,191,500 | 2,153 | -0.94% | 65.63% |
| HINDUNILVR | 2,650,200 | 2,227.55 | -0.40% | 62.62% |
| CIPLA | 1,782,300 | 922.3 | -2.10% | 61.67% |
| MOTHERSON | 13,366,500 | 117.5 | -3.81% | 58.71% |
| NESTLEIND | 87,825 | 17,294.55 | -1.02% | 57.73% |
(Decrease in price and increase in open interest)
52-week highs
Three stocks in the BSE 500 universe — the broadest index on the bourse — touched the milestone: TVS Motor Company, Ratnamani Metals and Blue Dart.
52-week lows
Nine stocks in the 500-strong index hit 52-week lows:
| BAJAJFINSV | EPL | JCHAC |
| BIOCON | IDBI | STARHEALTH |
| DBL | INDIAMART | WOCKPHARMA |
