The Nifty is in consolidation mode. But its a consolidation that is also slowly taking the index higher. The week gone by saw the index gain in four out of the five trading sessions. It first surpassed the resistance at 23,300, followed by 23,400. By closing on Friday, it now stands at the cusp of 23,500, which has been the major resistance for the index since it scaled newer peaks.
Yet, the index continues to make higher highs on the charts. 23,441 on Wednesday, 23,481 on Thursday and now 23,490 on Friday, which stands as the new record high for the Nifty. The market will resume trading after the long weekend on Tuesday.
The market now looks for directional cues as most major events are out of the way, including the election results, government formation, the RBI policy as well as the Fed rate decision.
It is just two more weeks for the April-June quarter to end, post which, companies would begin to release their quarterly business updates and earnings season would begin as well for the June quarter. The month of July would also see the tabling of the first Union Budget of the newly elected government, dates for which are yet to be confirmed. Sources told CNBC-TV18 that the budget presentation may happen on July 22.
For now, the action remains stock specific as the Nifty and the Nifty Bank both have important levels to cross before they head for the next leg of their rally on the upside.
Both foreign and domestic institutions were net buyers in Friday’s trading session in the cash market.
23,500 is the initial hurdle for the Nifty, which has been so in the last week. Once this is surpassed, the index can rally towards 23,900 – 24,000, said Ruchit Jain of 5paisa.com. He advises any dip towards support levels of 23,300, followed by 23,000 and 22,900 to be used as a buying opportunity.
Hrishikesh Yedve of Asit C Mehta Investment Interrmediates said that the index falls below 23,330, it can witness a bout of profit booking. However, a move towards 24,000 is seen only if the Nifty sustains above 23,500. Immediate support is at 23,000, followed by 22,760.
The market is currently witnessing a positive consolidation and as long as it remains above 23,200, the positive sentiment will continue, said Amol Athawale of Kotak Securities. He sees a move above 23,500 to take the Nifty towards 23,750 in the short term and the trend can change only on a slip below 23,200.
Among the two indices, the Nifty Bank turned out to be an underperformer last week, but managed to close above the mark of 50,000 for the first time after two weeks and only by just two points. The level of 50,000 has been the resistance for the Nifty Bank throughout the June series and chartists too believe that crossing that is imperative for it to move further higher towards its previous record high of 51,133. For the week, the Nifty Bank ended with gains of 0.4%.
The Nifty Bank witnessed strong put writing at the 50,000 strike along with the Call writers. The options activity at this strike will provide cues about the upcoming direction of the Nifty Bank, said Ashwin Ramani of SAMCO Securities.
Kunal Shah of LKP Securities maintained that the Nifty Bank will have to decisively surpass 50,200 to confirm an upside breakout towards levels of 51,000. The lower end support is between 49,500 – 49,400 and a break below that will open further downside towards 49,000, he added.
What Are The F&O Cues Indicating?
These stocks added fresh long positions on Friday, meaning an increase in both price and Open Interest:
StockPrice ChangeOI ChangeABB India6.72%11.43%ICICI Prudential2.88%7.47%ICICI Lombard4.29%5.72%Cummins India3.00%5.28%Adani Enterprises1.38%5.75%
These stocks added fresh short positions on Friday, meaning a decline in price but an increase in Open Interest:
StockPrice ChangeOI ChangeBalrampur Chini-2.32%13.78%Wipro-1.49%7.57%Muthoot Finance-1.68%7.20%ICICI Bank-0.54%5.64%Indus Towers-0.29%4.67%
Short covering was seen in these stocks on Friday, meaning a decline in Open Interest but an increase in price:
StockPrice ChangeOI ChangeJK Cement1.71%-10.99%GMR Airports2.29%-9.35%Sun TV0.15%-7.97%Titan1.64%-7.96%Shriram Finance1.69%-7.52%
These are the stocks to watch out for ahead of Tuesday’s trading session:
Zomato: Confirms to the exchanges that they are in talks with Paytm to acquire their entertainment business. However, no binding decision has been taken yet. Paytm also confirmed that there are talks ongoing without naming Zomato, but said that they want to focus on their core business and entertainment business is one of the options being considered for a sale.
LIC: Clarifies on plans to enter health insurance business saying that no formal proposal has been initiated yet. However, the company evaluates and explores various strategic opportunities in the ordinary course. It also said that the company also explores inorganic options for growth and expansion of business, including strategic partnerships and investment opportunities.
ONGC / Oil India: Windfall tax on crude cut to ₹3,250 per tonne from ₹5,200 per tonne from June 15. Windfall tax on export of diesel, petrol and ATF continues to remain at nil.
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