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    Trade setup for July 21: Nifty approaches a key hurdle as the bulls give it a 4% lift in 4 days

    Trade setup for July 21: Nifty approaches a key hurdle as the bulls give it a 4% lift in 4 days

    Trade setup for July 21: Nifty approaches a key hurdle as the bulls give it a 4% lift in 4 days
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    By Sandeep Singh   IST (Updated)

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    Trade setup for Thursday, July 21: Some profit booking in the Nifty50 cannot be ruled out at higher levels, say experts. Here's what the technical charts suggest:

    Indian equity benchmarks continued their winning run for a fourth back-to-back session on Wednesday, led by gains in IT, oil & gas and financial shares. Investors awaited more of corporate earnings from India Inc for domestic cues.
    What do the charts suggest for Dalal Street now?
    The Nifty50 has formed a small bearish candle near important resistance, and one can expect some profit booking at higher levels given the market is in an overbought situation, according to Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
    "For the bulls, levels of 16,550 and 16,600 would act as an immediate resistance. On the flipside, key support would be in the 16,450-16,400 zone," he said.
    More upside in Nifty Bank?
    "The Nifty Bank faces some profit booking at higher levels but remains in an uptrend with a 'buy on dip' approach," said Kunal Shah, Senior Technical Analyst at LKP Securities.
    He sees an immediate hurdle for the banking index at 36,300-36,500, a band coinciding with its 200-day moving average. The Nifty Bank might consolidate in a 35,500-36,500 range with a positive bias as long as the mentioned support is held on a closing basis," he added.
    Here are key things to know about the market ahead of the July 21 session:
    SGX Nifty
    Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — moved within a 43-point range around the flatline on Thursday, suggesting a muted start ahead on Dalal Street.
    Global markets
    Equities in other Asian markets slipped into the red amid concerns about steep hikes in COVID-era interest rates and their impact on economic growth. 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 0.1 percent, China's Shanghai Composite 0.4 percent and Hong Kong's Hang Seng 0.9 percent.
    S&P 500 futures were down 0.2 percent. On Wednesday, the three main Wall Street indices rose amid positive earnings signals, with the S&P 500 rising 0.6 percent. The Dow Jones finished 0.2 percent higher and the tech stocks-heavy Nasdaq Composite 1.6 percent.
    Important levels to track
    The Nifty50 is about three percent below its long-term simple moving average in a bearish sign.
    Period (No. of sessions)SMA
    Nifty50Nifty Bank
    516,114.7
    35,048.1
    1016,119.135,021.1
    2015,92634,263.2
    5016,028.634,275.8
    10016,52735,117.7
    20017,066.436,438.7
    Om Mehra, Technical Associate at Choice Broking, has identified the following levels to watch out for:
    IndexSupportResistance
    Nifty5016,40016,650-16,700
    Nifty Bank35,45036,500
    FII/DII activity
    Call/put open interest
    The maximum call open interest is accumulated at the strike price of 16,600, with 1.6 lakh contracts, and the next highest at 16,700 and 16,800, with 1.3 lakh contracts each, according to exchange data.
    The maximum put open interest is at 16,000, with 2.1 lakh contracts, and at 16,200, with 1.5 lakh.
    This suggests an immediate hurdle at 16,600 and immediate support at 16,200.
    Long build-up
    Here are five stocks that saw an increase in open interest as well as price:
    StockCurrent OICMPPrice changeOI change
    FSL11,070,800110.75.08%16.20%
    COFORGE922,6503,494.504.20%14.11%
    CROMPTON3,535,500397.350.58%13.49%
    PERSISTENT685,6503,521.705.71%11.27%
    WIPRO42,663,000411.21.16%10.26%
    Long unwinding
    StockCurrent OICMPPrice changeOI change
    ACC2,2801.8-25%-62.50%
    NAUKRI4,000141.45-14.09%-52.41%
    HAL1,80053.7-13.18%-48.18%
    TCS4,1000.25-37.50%-45.45%
    DLF34018.4-23.33%-44.12%
    (Decrease in open interest as well as price)
    Short covering
    StockCurrent OICMPPrice changeOI change
    SAIL112,860,00072.751.04%-14.68%
    BSOFT3,874,000334.32.03%-5.34%
    TCS13,632,3003,161.102.57%-5.04%
    HCLTECH17,159,100916.052.60%-4.03%
    TATACHEM4,795,0008610.08%-4.00%
    (Increase in price and decrease in open interest)
    Short build-up
    StockCurrent OICMPPrice changeOI change
    SYNGENE1,221,000603.05-1.70%24.90%
    NAVINFLUOR364,5003,667-2.07%21.05%
    ASTRAL622,3251,766.95-1.05%16.66%
    ICICIGI2,820,3001,216.40-3.90%14.36%
    HAVELLS5,734,0001,223-2.90%13.48%
    (Decrease in price and increase in open interest)
    52-week highs
    A total of 14 stocks on the BSE 500 — the broadest index on the bourse —touched the milestone: TVS Motor, Bajaj Auto, Eicher, ITC, Mahindra & Mahindra, Cummins, AIA Engineering, Adani Enterprises, Adani Total, Blue Dart, Federal Bank, Tube Investments, Timken and Varun Beverages.
    52-week lows
    No stock in the 500-scrip pack hit a 52-week low.
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