Followed by last week, this week also both benchmark indices closed on a negative note. Bank Nifty formed triple top and rejected from those levels while Nifty also rejected from its previous highs. Mounting fears about the increasing spread of the Delta variant of the coronavirus around the world has dampened the Indian Stock Market outlook. Nifty Realty was among the top outperformer witnessed heavy buying interest during the week. FIIs continued to be in red whereas DIIs were little inclined towards the buying side.
Stock Market Summary
The market traded on a bearish tone during the week, as weakness came from Global cues. Investors feared the Delta virus variant which is spreading rapidly that can slow down the worldwide economic recovery. Financials stock showed some underperformance during the week. Tata Motors stock plunged almost 10% amid the news from the (JLR). The realty index was among the top outperformer as Brigade hits the new 52-week high.
Sector Wise Performance
Nifty Realty witnessed some heavy buying interest, despite some broader bearish markets tone. The Nifty Realty index traded on a bullish note with brigade being the outperformer on the index.
Nifty Metal closed the week on a bullish note and emerges among the top bulls. Tata Steel was the top gainer, while Vedanta and NALCO also moved higher.
The Nifty IT continued to struggle throughout the week amid some bearish market tone in the markets. The IT sector remained in focus as TCS announced its result while the other IT giants like Infosys and Wipro will announce earnings in the week ahead.
Nifty Pharma index closed the week on a negative note as this was due to the reason that investors were cautious amid weak global cues. Otherwise, the pharma sector has been on the upsurge and according to reports, the medical and pharmaceutical sector has rewarded investors with nearly 70% return in the last financial year.
Nifty Auto declined the most this week amid the broad-based selloff in the broader markets. Tata Motors continued to remain under pressure. Many auto companies have been updating the provisional quarterly performance and investors following that keenly. The Tata-Group-led automobile flagship announced sales figures for its luxury car brand Jaguar Land Rover(JLR) for three months to 30 June 2021. It said that the ongoing global shortage in semi-conductor chips will lead to a 50% decline in production for Jaguar Land Rover (JLR) in the September quarter.
Now, what’s next ????
Nifty and Bank Nifty have been consolidating in the narrow range, which is likely to end once the range of 15600—15900 is violated on either side in Nifty. And in Bank Nifty 34000—36000 is the prevailing range. Currently, most of the trading action is within this range and the clear strategy that can be played out in the current market is buying near support and selling near the resistance until the range is intact. At present Most of the trading opportunities can be found in mid-cap and small-cap stocks so more focus should be on that segment.
Events that may add volatility, Need to be watched
*12th July 2021 – Monday – CPI (YoY) (Jun)
* 12th July 2021 – Monday – Cumulative Industrial Production (May)
* 12th July 2021 – Monday – Manufacturing output(MoM) (May)
*12th July 2021 – Monday – Industrial Production (YoY) (May)
* 14th July 2021 – Wednesday – WPI FOOD (YoY)
*15th July 2021 – Thursday-Weekly Expiry
*FII and DII participation
Technical View on Stock Market
Nifty slipped into weakness after facing resistance at the all-time highs. Weak global cues also played role in the weakening of the markets. The Relative Strength Index also faced resistance at the 70 levels and edges lower towards the 65 levels. The index started the week on a positive note but does not able to move beyond its previous highs which are also all-time highs. But the index continued to trade above its lower support level. A negative candle is formed on the weekly charts with the small upper wick. Now continuously two red candles can be seen at the tops on the weekly charts and also while looking at the candlesticks pattern on the intraday charts a double top kind of pattern is seen at the 15915 levels.
On the technical oscillators front, things are deteriorating in favor of bears with the weekly MACD chart generating a sell signal after briefly remaining in a buy mode for three preceding weeks. Nifty currently is placed at the support level of 20-day EMA and a minor up sloping trendline is placed around the 15600—15550 levels. Any decisive move below this range would likely bring more weakness on the charts. Support awaits at 15430, which is also the breakout zone, and then by 15240 and finally at 15000 levels. Resistance is at the all-time highs, index finding difficult to break, followed by 16200 and 16500.
On the options front, maximum Put open interest was seen at 15500 followed by 15000 strike while maximum Call open interest was seen at 16000 followed by 15800 strikes. Minor Call writing was seen at 15700 then 16100 strikes while minor Put writing was seen at 15200 and 15300 strikes. Options data indicates that the immediate trading range for the Nifty is around 15500—15900.
Nifty Futures strategy for the day
Resistance comes at 15800 and support lays down at 15600.
Strategy – Fresh Buy above 15800 for the targets of 15880—15940 on the upside, or Else it could test its support level of 15600.
Bank Nifty index pulled back from its tops as some selling pressure seen from the highs. Looking at the daily charts index has formed a triple top kind of pattern. Basically, this pattern is showing that the price is moving between defined support and resistance levels. The index has challenged the resistance level of 35900 and from there it moved back to its lower end of the range. Heavyweights private banks dragging the sector most.
On the weekly charts index has formed a Red Doji candle which clearly indicates the tug of war between the bulls and bears and if we put some light on the near-term perspective it would become very clear that the Bank Nifty index has clearly traded in a range of 34000—36000. A sustainable level above the 36000 levels would result in a fresh breakout and in that case, we can expect the Bank Nifty to extend the rally towards the 37000—38000. Level below 34000 would violate the current consolidation on the downside and in that case, we can expect further weakness in the index.
Nifty Bank Futures strategy for the day
Resistance at 35600 and Support at 34800.
Strategy – Either buy above 35600 for the target of 36900—36200 or Sell below 34800 for the downside target of 34000.
Weekly Sector Update
New virus delta variants spreading very fast, because of this a bearish movement seen in the Nifty pharma sector in the whole week.
The decline started on Monday in the sector which has been seen till the next day. But on Wednesday, after a slight decline, there has been some upside movement in the sector and again there was a decline on Thursday.
Nifty Pharma was the top gainer on Friday by 90.90 points or up by 0.64% whole week performance is down by -1.17%. The trend of the index is quite upward on the last day of the week.
Nifty Pharma may again see a slight uptick in the coming week. Indicators are also showing buying interest. RSI is facing upwards like the rope will cross its middle band and run on the upper side for the upper band. Indicator Macd is also seeing positivity.
Above 14395 index will show positivity upside target will be 14535 with the downward support 14245.
CADILAHC – Above 642 stock is showing buying interest. Stop loss will be 620 and the upside target 665 for the coming week.
Weekly Top Stocks Recommendations
The stock has given a positive close on a weekly note and formed a bullish pattern on the daily chart. The sugar sector is in the limelight from the past few months. All major sugar stocks performed and still look solid for the next trading sessions.
The stock has a near hurdle around 83 and support around 77. Traders can go for buy around 80 for the upside move till 88 and then to 94 levels in days to come.
Support and stop loss below 72 on a closing basis.
NTPC (July) contract in Daily chart trading in narrow a range after price & volume breakout. It indicates that buyers accumulate stock for moving towards upside movement. The breakout will be after price break at the level of 119.
Recommendation: Buy NTPC (July) contract above 119 level for the first target of 122 level & further target of 127 level with maintaining the stop-loss of 116.
Traders can trade safely in Nifty, Bank Nifty and Stocks recommendations with levels only. More will update during market hours.
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