Trade setup for today: Top 15 things to know before the opening bell

Indian equities closed on a higher note on Friday, extending their winning run to the sixth consecutive session, as bulls gained momentum. Benchmark share indices gradually reclaim milestones one after another, with Nifty rising from its 52-week low of 15,190 hit in June to 16,700 levels on July 22.

On Friday, the BSE Sensex settled at 56,072, up 390 points, while the Nifty50 consistently traded above 200 days exponential moving average and rose 114 points to close at 16,719, taking the total recovery to 10 percent from the 52-week lows. The index has seen a bullish candlestick pattern on the daily, weekly as well as monthly charts.

"As this index is consistently trading above 200-day exponential moving average (EMA), dips can remain a buying opportunity as long as it sustains above 16,500 levels on a closing basis," said Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.

As the Nifty is in the overbought zone accompanied by a 25-day-old channel resistance at around 16,752, if it slips below 16,610, it can attract selling pressure towards 16,500-16,480, he said, adding however, if the index closes above 16,793, it can extend the rally to 17,000.

The best buying opportunity will emerge only on a dip and long-side traders should book profits by making use of the current strength, the market expert advised.

But the broader markets appeared to be overbought or cautious after significant run up, as the Nifty Midcap 100 closed flat and Smallcap 100 indices gained 0.37 percent on Friday. The market breadth was not very strong either as about 1,024 shares advanced against 919 declining shares on the NSE.

We have collated 15 data points to help you spot profitable trades:

Key support and resistance levels on the Nifty

As per the pivot charts, the key support level for the Nifty is placed at 16,636, followed by 16,553. If the index moves up, the key resistance levels to watch out for are 16,777 and 16,835.

Nifty Bank

The Nifty Bank rallied 538 points or 1.5 percent to 36,739 on Friday, the highest closing level since April 21, and formed bullish candle on the daily charts. The important pivot level, which will act as crucial support for the index, is placed at 36,409, followed by 36,079. On the upside, key resistance levels are placed at 36,946 and 37,153 levels.

Call option data

Maximum Call open interest of 59.61 lakh contracts was seen at 17,000 strike, which will act as a crucial resistance level in the July series.

This is followed by 16,800 strike, which holds 44.98 lakh contracts, and 16,700 strike, which has accumulated 41.63 lakh contracts.

Call writing was seen at 17,200 strike, which added 19.8 lakh contracts, followed by 17,100 strike which added 19.46 lakh contracts and 16,700 strike which added 17.56 lakh contracts.

Call unwinding was seen at 16,600 strike, which shed 5.54 lakh contracts, followed by 16,500 strike which shed 2.72 lakh contracts and 16,400 strike which shed 1.56 lakh contracts.

Put option data

Maximum Put open interest of 72.83 lakh contracts was seen at 16,500 strike, which will act as a crucial support level in the July series.

This is followed by 16,000 strike, which holds 57.45 lakh contracts, and 15,800 strike, which has accumulated 56.20 lakh contracts.

Put writing was seen at 16,700 strike, which added 31.25 lakh contracts, followed by 15,800 strike, which added 27.64 lakh contracts and 16,500 strike which added 27.23 lakh contracts.

Put unwinding was seen at 15,500 strike, which shed 7.61 lakh contracts, followed by 15,200 strike which shed 2.67 lakh contracts, and 15,300 strike which shed 2.47 lakh contracts.

Stocks with a high delivery percentage

A high delivery percentage suggests that investors are showing interest in these stocks. The highest delivery was seen in Power Grid Corporation, Oracle Financial, Hindustan Unilever, Indian Oil Corporation, and Asian Paints, among others.

56 stocks saw long build-up

An increase in open interest, along with an increase in price, mostly indicates a build-up of long positions. Based on the open interest future percentage, here are the top 10 stocks including Nifty Financial, Chambal Fertilizers, JK Cement, India Cements, and UltraTech Cement, in which a long build-up was seen.

42 stocks saw long unwinding

A decline in open interest, along with a decrease in price, mostly indicates a long unwinding. Based on the open interest future percentage, here are the top 10 stocks including RBL Bank, Can Fin Homes, ABB India, NBCC, and Havells India, in which long unwinding was seen.

61 stocks saw short build-up

An increase in open interest, along with a decrease in price, mostly indicates a build-up of short positions. Based on the open interest future percentage, here are the top 10 stocks including Syngene International, Torrent Power, Indiabulls Housing Finance, Deepak Nitrite, and Mahanagar Gas, in which a short build-up was seen.

37 stocks witnessed short-covering

A decrease in open interest, along with an increase in price, mostly indicates a short-covering. Based on the open interest future percentage, here are the top 10 stocks including Dalmia Bharat, Eicher Motors, Bajaj Finserv, M&M Financial Services, and Cholamandalam Investment, in which short-covering was seen.

Bulk deals

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Results on July 25

Axis Bank, Tata Steel, Tech Mahindra, Canara Bank, Macrotech Developers, KPIT Technologies, Aether Industries, Anupam Rasayan India, Aurionpro Solutions, Central Bank of India, Century Textiles & Industries, Chennai Petroleum Corporation, Craftsman Automation, Glaxosmithkline Pharmaceuticals, Indian Energy Exchange, IIFL Wealth Management, Jindal Stainless, Jyothy Labs, Lakshmi Machine Works, Orient Electric, RattanIndia Power, Sharda Cropchem, Sterlite Technologies, Tanla Platforms, Tatva Chintan Pharma Chem, and Tejas Networks will be in focus ahead of June quarter earnings on July 25.

Stocks in News

Reliance Industries: The billionaire Mukesh Ambani-owned company reported robust operating and financial performance across all businesses for the quarter ended June 2022, with highest ever quarterly revenue for O2C (oil-to-chemical) business in a volatile environment, and best ever quarterly revenue for Reliance Retail, and Jio Platforms. The company clocked a 41% year-on-year growth in consolidated profit after tax at Rs 19,443 crore in Q1FY23, and gross revenue grew by 53% to Rs 2,42,982 crore for the quarter YoY, while EBITDA for the quarter at Rs 40,179 crore was higher by 45.8%.

ICICI Bank: The country's second-largest private sector lender clocked a 50 percent year-on-year growth in standalone profit at Rs 6,905 crore for the quarter ended June 2022, as bad loan provisions declined sharply YoY. Net interest income increased by 20.8 percent to Rs 13,210 crore, compared to Rs 10,936 crore reported in corresponding period previous fiscal, with 21 percent growth in advances and 13 percent increase in deposits YoY. Asset quality showed improvement on sequential basis.

Kotak Mahindra Bank: The bank clocked 26.1 percent year-on-year increase in standalone profit at Rs 2,071.15 crore for the quarter ended June 2022, aided by lower bad loan provisions, with improving asset quality performance. Net interest income grew by 19.2 percent YoY to Rs 4,697 crore for the quarter.

Yes Bank: The private sector lender has reported a 50.17 percent year-on-year growth in profit after tax at Rs 310.63 crore for Q1FY23, with significant fall in bad loan provisions and higher net interest income. Net interest income for the quarter rose 32 percent YoY to Rs 1,850 crore, with 14 percent YoY credit growth and 18 percent increase in deposits.

GAIL India: The state-owned natural gas company said the board will hold a meeting on July 27 to consider issuance of bonus shares. Hence, the trading window for dealing in securities of GAIL for designated persons and their immediate relatives will remain closed till the approval of financial results for the quarter ended June 2022.

JSW Steel: The steel company has recorded a 86 percent year-on-year decline in consolidated profit at Rs 839 crore for the quarter ended June 2022, impacted by weak operating performance. Operating expenses were higher including higher input cost, finance cost, and power & fuel cost. Revenue increased 32 percent to Rs 38,086 crore during the quarter YoY.

Granules India: The US FDA has completed an inspection of the facility of Granules Pharmaceuticals Inc, with six observations. Granules Pharmaceuticals Inc is a wholly-owned foreign subsidiary of the company located at Virginia, USA and inspection of the said facility by USFDA completed on July 22.

HFCL: The telecom equipment & optical fiber solutions provider has registered 42 percent year-on-year decline in profit at Rs 53 crore for quarter ended June 2022 impacted due to spill over of service billing followed by non-availability of required infrastructure from the customer end and also continued shortage of semiconductors. Revenue declined 13 percent to Rs 1,051 crore during the same period, but exports grew by 167 percent YoY, with strong order book worth more than Rs 5,300 crore as of June 2022.

Fund Flow

FII and DII data

Foreign institutional investors (FIIs) have net sold shares worth Rs 675.45 crore, whereas domestic institutional investors (DIIs) net bought shares worth Rs 739.38 crore on July 22, as per provisional data available on the NSE.

Stocks under F&O ban on NSE

Three stocks - Indiabulls Housing Finance, RBL Bank and Delta Corp - are under the NSE F&O ban list for July 25. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.