The Indian market witnessed profit-booking on the July F&O expiry day. The Nifty may have lost 100 points on Thursday but from the expiry-to-expiry perspective, the index is up nearly 8 percent.
From 10,288 on June 25, the Nifty rose to 11,102 on July 30, which translates into a rally of about 7.9 percent in almost a month.
Let’s look at the final tally on D-Street – the S&P BSE Sensex fell 335 points to 37,736 while the Nifty50 plunged 100 points to close at 11,102.
Sectorally, the action was seen in healthcare, IT, and realty stocks while profit-booking was visible in the public sector, oil & gas, and telecom. The Nifty Bank closed nearly 2 percent lower at 21,646.
Experts are of the view that RIL results, which will be declared after market hours on July 30, will dictate the trend on D-Street on Friday. If the index shows weakness on Friday, traders are advised to create short positions.
“After a mixed outing in the first half, selling intensified towards the closing stages of the trading session, mainly due to expiry pressure of the current month's contracts and the sudden fall in US stock futures,” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities told Moneycontrol.
“Indian markets will also react to the results of RIL on Friday. The Nifty can fall to 10,950 or 10,850 if it breaks 11030. On the higher side, resistance exists at 11,150 and 11,200 levels. It is advisable to create short positions around 11,200 or below the level of 11,030,” he said.Also read: Gainers & Losers: 10 stocks that moved the most on July 30
We have collated views of experts on what investors should do on July 31 when the market resumes trading:
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The recent attempt of an upside breakout of the sideways range at 11,250 seems to have turned out to be a false upside breakout, as the Nifty reversed down sharply in the last couple of sessions from a swing high of 11,341.
We observe consistent upmoves in the Nifty as per the positive sequence of higher highs and lows in the last one month. The extent of downward corrections was limited to a couple of sessions during this uptrend. Hence, any weakness from here could be a buy-on-dips opportunity, as long as the Nifty holds above 10,900 in the near term.
The overhead resistance of 11,250-11,350, as per long term charts like weekly/ monthly, could signal a possibility of a deep correction in the market if immediate supports break lower. Hence, long-trading positions need to be protected with the stop loss of 10,900 levels.
The short-term trend of Nifty seems to have turned down and a move below 11,000 could confirm short-term trend reversal in the market.
A decisive move below 10,900 is expected to drag the Nifty to 10,700-10,650. On the way up, 11,300 is going to be strong overhead resistance.
Ajit Mishra, VP - Research, Religare Broking Ltd
We’re not surprised by the recent profit-taking phase and expect a further correction. Markets will first react to the index heavyweight Reliance's results in the early trade on Friday and that may set the tone for the rest of the session.
Traders should keep a close eye on 11,050 in the Nifty, as its breakdown will trigger a decline towards 10,950 else consolidation will continue. Traders should prefer hedged bets and maintain positions on both sides.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas
The Nifty started the day on a positive note but couldn't stretch beyond 11,300. The bears took control thereon and dragged the index significantly down. The decline can be attributed to a follow-through of the bearish outside bar formation on July 29.
On the downside, the Nifty found support at a crucial rising trendline. So, the index is still within the 11,050-11,350 range.
The bears, however, are gearing up to break the lower end of the range. Once the support zone of 11,050-11,000 breaks, the index will be set for a significant correction.
Rohit Singre, Senior Technical Analyst at LKP Securities
The index expired the July series at 11,102 with good gains of nearly 8 percent on the expiry basis and formed a bullish candle for the second consecutive expiry.
Going forward 11k will act as a make or break level any decisive break below 11k mark can lead to strong profit-booking, which can drag the index toward 10900-10800. On the other hand, the Nifty has formed a good resistance near 11,200-11,300 zone, fresh upsides only above 11,300.
The Nifty Bank gives July expiry at 21,647 with gains of nearly one percent on expiry basis, support for the Nifty bank is coming near 21400-21000 zone and resistance near 21900-22150 zone.
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