What will give the bulls further heart is the fact that not only did the Nifty recover from the lows of the day, which came at the midpoint of the 23,400 – 23,300 support zone, but also ended in the positive territory, well above the mark of 23,500.
The broader markets though had a mixed day. The Midcap index recovered nearly 700 points from the lows of the day to end with gains, but the Smallcap index, despite the recovery from the lows, could not recover all of its losses.
Specific pockets dominated Monday’s trade. As swiftly as the fertiliser stocks went up all of last week, they sold off equally swiftly on Monday after no headway was made on the GST rate cut for the sector. On the other hand, holding company stocks sprung into action with most of them ending 20% higher post a SEBI Circular on a special call option for fair price discovery. You can read more on that here.
Till the end of the series, barring a specific trigger, the action in the market is most likely to remain confined to specific pockets. The market also looks forward to the presentation of the Union budget, the official date for which is yet to be announced. Before the union budget though, the companies will start reporting their June quarter business updates starting next week, followed by their quarterly results.
Immediate support for the Nifty is placed at 23,350 – 23,300, which is the level from where the Nifty recovered on Monday. Till that is intact, the momentum remains positive, said Ruchit Jain of 5paisa.com. On the upside, 23,650 – 23,700 is a level for the Nifty, which, if surpassed, could take the index towards 23,900 – 24,000.
Rajesh Bhosale advises avoiding aggressive bets on the index and focus on playing the range by buying on dips and booking longs at higher levels. Key support remains at 23,350 for the Nifty, followed by the 89-EMA on the hourly chart at 23,300. On the upside, 23,650 – 23,700 is the barrier.
For Nifty’s day traders, 23,400 will be a key support, according to Kotak Securities’ Shrikant Chouhan. Above these levels, the Nifty has the potential to test levels of 23,670 or even 23,750. On the downside, a slip below 23,400 can accelerate the selling towards 23,320 or even 23,275 levels.
The Nifty Bank, the star of last week also witnessed a buy-on-dips pattern. That was not the only positive from Monday’s session. It also managed to hold on to its earlier record high of 51,133 on the downside, reversing from levels of 51,138 and recovering nearly 600 points from the lows. The index is now just 250 points away from its recent high of 51,957.
The Nifty Bank has retested the recent breakout point which indicates strength, said Hrishikesh Yedve of Asit C Mehta Investment Interrmediates. He advises continuing with the buy on dips strategy till the index holds the 51,000 mark. On the higher side, 52,000 will continue to act as a barrier.
Om Mehra of SAMCO Securities said that the daily MACD and RSI indicators remain positive, indicating ongoing bullish strength. Only a break above levels of 52,000 will take the index towards the 52,440 – 52,500 range.
What Are The F&O Cues Indicating?
These stocks added fresh long positions on Monday, meaning an increase in both price and Open Interest:
| Stock | Price Change | OI Change |
| Shriram Finance | 1.89% | 13.42% |
| UltraTech | 1.01% | 8.46% |
| Chola Finance | 2.65% | 7.34% |
| InfoEdge | 3.37% | 5.60% |
| SBI Card | 0.20% | 5.42% |
These stocks added fresh short positions on Monday, meaning an increase in Open Interest but a decline in price:
| Stock | Price Change | OI Change |
| SBI Life | -0.57% | 6.50% |
| SAIL | -3.70% | 5.59% |
| Aurobindo Pharma | -1.64% | 5.59% |
| Glenmark | -0.82% | 5.52% |
| IndusInd Bank | -2.18% | 5.38% |
Short covering was seen in these names on Monday, meaning an increase in price but a decline in Open Interest:
| Stock | Price Change | OI Change |
| Aditya Birla Fashion | 0.81% | -25.39% |
| JK Cement | 0.16% | -23.43% |
| M&M Finance | 0.02% | -21.81% |
| United Breweries | 0.96% | -21.45% |
| Gujarat Gas | 1.47% | -20.39% |
Unwinding of long positions was seen in these stocks on Monday, meaning a decline in both price and Open Interest:
| Stock | Price Change | OI Change |
| Navin Fluorine | -0.99% | -25.89% |
| NMDC | -1.65% | -21.07% |
| Coromandel International | -0.35% | -19.13% |
| Escorts Kubota | -1.47% | -16.17% |
| Syngene | -0.75% | -15.50% |
These are the stocks to watch out for ahead of Tuesday’s trading session:
- Amara Raja Energy: Wholly-owned subsidiary Amara Raja Advanced Cell Technologies Pvt. Ltd. has signed a technical licensing agreement with GIB EnergyXSlovakia. As part of the agreement, GIB EnergyX will license Gotion’s world class LFP technology for lithium-ion cells to Amara Raja. The agreement enable Amara Raja to manufacture world class LFP cells in both cylindrical and prismatic form factors.
- Craftsman Automation: Enters into an MoU with Sunbeam Lightweighting Solution Pvt. Ltd. and Kedaara Capital Fund II LLP for acquiring the whole or part of the business of Sunbeam, excluding certain specific assets of Sunbeam, situated in Gurugram, in one or more tranches. The completion of the proposed transaction remains subject to completion of due diligence, final approval of the board, execution of the definitive documents, and completion of customary conditions.
- Borosil: Launches QIP to raise funds. Floor price of ₹331.75 is a 4.4% discount to Monday’s closing price. The company may, at its discretion, offer a 5% discount on the floor price for the issue price of the QIP.
- Swan Energy: Enters into a share purchase agreement to acquire 49% of the total equity in TOPL from Indian Farmers Fertiliser Cooperative Ltd. (IFFCO) for a total consideration of ₹440 crore. The first tranche of ₹400 crore has already been paid to IFFCO.
- SH Kelkar: Wholly-owned subsidiary Keva Flavours Pvt. Ltd. has entered into a share purchase agreement to sell 40% of its stake held in NuTasteFood and Drink Labs Pvt. Ltd. Post this sale, KFL will still hold 40% stake in NuTaste. The sale consideration is ₹12.5 crore.
- Muthoot Capital Services: To foray into the insurance business after initiating registration as a corporate agent with the Insurance Regulatory and Development Authority of India (IRDAI).
- Vishnu Prakash R Punglia: Awarded contract by Public Works Department of Goa for construction of 15 MLD water treatment plant. The tender has a total contract value of ₹67.8 crore.
- KIMS: Board meet on June 28 to consider stock split.
- RBL Bank: Board meet on June 27 to consider fund raising.
- AU Small Finance Bank: Board meet on June 27 to consider fund raising.
- Satin Creditcare: Board meet on June 27 to consider fund raising.
- Ind-Swift Laboratories: Board meet on June 27 to consider fund raising.
