The Nifty closed in the green for the third straight day despite muted Asian markets as a smart rally in IT and capital goods stocks supported the index even as the Zomato IPO hogged the limelight on July 14.
The initial public offering of Zomato, one of the leading food-delivery platforms in India, was fully subscribed by 4.50 pm on July 14, the first day of bidding. The retail investors, as expected, were at the forefront, with the portion set aside for them had been subscribed 2.64 times.
IT stocks rallied ahead of Infosys numbers, which were declared after the market closed, and Wipro result on July 15. Infosys closed with gains of over 2 percent and Wipro rallied over 7 percent, making it the top Nifty gainer.
Infosys reported a consolidated profit of Rs 5,195 crore for the quarter ended June 2021, up from Rs 5,076 crore in the previous quarter. Consolidated revenue in rupee terms grew to Rs 27,896 crore from Rs 26,311 crore in March 2021 quarter.
The S&P BSE Sensex rose 134 points to end at 52,904, while the Nifty gained 41 points to close at 15,853.
“Dropping institutional participation rates have contributed in part to a 20 percent drop in daily market volumes. However, market breadth and retail participation in futures segment continue to remain robust and underpinning strength in ongoing broad market rally,” S Hariharan, Head- Sales Trading, Emkay Global Financial Services, said.
“Very strong investor interest in new issuances like Zomato, Tatva Chintan, Clean Science, etc have also contributed to some extent to reduced flows into the second segment, and a loaded pipeline of issues in the coming few months would be expected to play a similar role,” he said.
Also read: Zomato IPO opens for subscription today: Should you place an order?
Hariharan added that the ongoing results season is expected to see strong numbers from IT, chemicals and real estate businesses, while numbers would be relatively weaker for autos and financials.
Sectorally, buying was seen in IT, capital goods, and healthcare stocks, while profit-taking was seen in realty, oil & gas, energy, and auto stocks.
The S&P BSE midcap index rose 0.2 percent and the smallcap index was up 0.2 percent.
India VIX fell 0.24 percent from 12.62 to 12.59 levels. The decline in the VIX again gave stability to the market to commence the next move.
On the options front, the maximum Put OI is placed at 15,500 followed by 15,000 strikes, while the maximum Call OI is at 16,000 followed by 15,800 strikes. Options data suggests an immediate trading range in between 15,700 to 16,000 zones.
Here’s what experts suggest investors should do on July 15:
Expert: Sahaj Agrawal, Head of Research- Derivatives, Kotak Securities
The Nifty has been consolidating in a narrow range for the past few trading sessions. The medium-term view remains positive, with buying on dips advisable.
For the short term, consolidation is expected to continue with resistance seen at 15,980. Realty and NBFC stocks are expected to trade with a positive bias.
Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services
The Nifty formed a bullish candle on the daily scale with a long lower shadow. It continued forming higher highs- higher lows from the third consecutive session.
The index has been moving between 15,632 and 15,915 for the last 16 sessions and requires a decisive range breakout to commence the next leg of the rally.
The index has to hold above 15,800 to witness an up move towards 15,915 and 16,000, while on the downside, support exists at 15,750 and 15,600.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The index managed to get closer to 15,900 but did not close above it. We are a tad away from that resistance patch and if we can get past it, we should target 16,100.
The level of 15,400 is a strong support and until that does not break on a closing basis, the overall trend will remain bullish. Traders can adopt a buy-on-dips strategy and accumulate positions.
Gaurav Ratnaparkhi, Head, Technical Research, Sharekhan by BNP Paribas
The Nifty inched higher on July 14. It recently broke out from a triangular pattern on the hourly chart and is witnessing follow-through on the upside. For the day, the upside was capped at the hourly and the daily upper Bollinger bands.
The overall structure shows that the index is again staring at the upper end of the consolidation range, which is 15,900. The bulls need to cross this barrier on a closing basis to confirm the next leg up, which will take the index to 16,400 in the short term.
On the flip side, 15,800-15,750 will act as a cushion in the case of any dip with major support at 15,650-15,600.
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