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

Representative image.

The market remained in the bear trap for the second consecutive session ahead of the Federal Open Market Committee (FOMC) meeting, as the BSE Sensex fell nearly 500 points to 55,268 on July 26, dragged by selling in most sectors.

The Nifty50 declined 147 points to 16,483.80 and formed a bearish candle on the daily charts.

"A long negative candle was formed on the daily chart, which signals that the downside momentum has started to pick up. The Nifty resumed its downward correction from near the crucial overhead resistance of 16,800 levels as per the concept of change in polarity. This value area of 16,800 has resulted in a sharp reversal on either side in the past during its breakouts," Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.

Shetti says the next lower supports to be watched are around 16,250 levels, which could be achieved in the next few sessions. "Immediate resistance to be watched are around 16,570 levels," he observed.

The Nifty Midcap 100 and Smallcap 100 indices corrected 1.25 percent and 1.5 percent respectively, as about three shares declined for every share advancing 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 16,419, followed by 16,355. If the index moves up, the key resistance levels to watch out for are 16,592 and 16,701.

Nifty Bank

The Nifty Bank fell 318 points to close at 36,408.50 on Tuesday and formed a bearish candlestick pattern on the daily charts. The important pivot level, which will act as crucial support for the index, is placed at 36,263, followed by 36,118. On the upside, key resistance levels are placed at 36,625 and 36,841 levels.

Call option data

Maximum Call open interest of 1.08 crore contracts was seen at 17,000 strike, which will act as a crucial resistance level in the July series.

This is followed by 16,700 strike, which holds 73.65 lakh contracts, and 16,600 strike, which has accumulated 64.91 lakh contracts.

Call writing was seen at 16,600 strike, which added 31.07 lakh contracts, followed by 16,500 strike which added 27.87 lakh contracts and 17,000 strike which added 19.59 lakh contracts.

Call unwinding was seen at 17,300 strike, which shed 11.58 lakh contracts, followed by 17,500 strike which shed 10.48 lakh contracts and 16,900 strike which shed 9.11 lakh contracts.

Put option data

Maximum Put open interest of 64.38 lakh contracts was seen at 16,000 strike, which will act as a crucial support level in the July series.

This is followed by 16,500 strike, which holds 50.32 lakh contracts, and 16,400 strike, which has accumulated 46.41 lakh contracts.

Put writing was seen at 16,100 strike, which added 8.5 lakh contracts, followed by 15,900 strike, which added 1.98 lakh contracts and 16,400 strike which added 1.61 lakh contracts.

Put unwinding was seen at 16,600 strike, which shed 19.42 lakh contracts, followed by 16,700 strike which shed 11.26 lakh contracts, and 16,300 strike which shed 11.23 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 HDFC Life Insurance, Siemens, GMR Infrastructure, Crompton Greaves Consumer Electricals, and SBI Life Insurance, among others.

12 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 Delta Corp, SBI Card, Escorts, Ramco Cements, and Coal India, in which a long build-up was seen.

101 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 Nifty Financial, Max Financial Services, Mahanagar Gas, Aarti Industries, and Coromandel International in which long unwinding was seen.

54 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 Vodafone Idea, Dixon Technologies, NTPC, Infosys, and Cholamandalam Investment in which a short build-up was seen.

31 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 NBCC, Crompton Greaves Consumer Electricals, JK Cement, Hindustan Copper, and ABB India in which short-covering was seen.

Bulk Deals

Zomato: Moore Strategic Ventures LLC sold 4,25,24,900 equity shares in the food delivery giant via open market transactions, at an average price of Rs 44 per share.

(For more bulk deals, click here)

Also read - Aswath Damodaran, Rakesh Jhunjhunwala vindicated as Zomato tanks 12% more

Results on July 27

Maruti Suzuki India, Tata Motors, Bajaj Finance, Biocon, Colgate-Palmolive, Aarti Drugs, CG Power and Industrial Solutions, Clean Science and Technology, Coromandel International, Dixon Technologies, EIH, Fino Payments Bank, Home First Finance Company India, JK Lakshmi Cement, Latent View Analytics, Laurus Labs, Novartis India, Poonawalla Fincorp, Schaeffler India, TeamLease Services, United Breweries, VIP Industries, and Welspun India will be in focus ahead of June quarter earnings on July 27.

Stocks in News

Larsen & Toubro: The engineering and infrastructure major posted consolidated profit after tax of Rs 1,702 crore, a robust 45 percent growth over the corresponding quarter of the previous year. It achieved consolidated revenues of Rs 35,853 crore in Q1FY23, recording YoY growth of 22 percent with strong execution witnessed in the infrastructure segment and riding on the sustaining growth momentum in the IT&TS portfolio. The company secured orders worth Rs 41,805 crore at the group level during the quarter ended June 2022, registering a growth of 57 percent YoY.

Tata Power Company: The power generation and distribution company recorded a 90 percent year-on-year growth in consolidated PAT before exceptional items at Rs 884 crore for the quarter ended June 2022, against Rs 466 crore in Q1FY22, due to improved performance across all businesses, mainly profit from coal companies. Consolidated revenue grew by 48 percent to Rs 14,776 crore during the same period.

Wipro: The IT services provider has announced a new five-year strategic engagement with Nokia, the world’s leading multinational, networking, telecommunications and consumer electronics company. The new agreement builds on a partnership originally established over 20 years ago.

Aditya Birla Sun Life AMC: The asset management company reported a 33.6 percent year-on-year decline in consolidated profit at Rs 102.84 crore for the quarter ended June 2022, dented by a loss at other income, and tepid topline growth. Revenue from operations grew by 0.44 percent to Rs 304.50 crore compared to the year-ago period. Mutual fund QAAUM (quarterly average assets under management) witnessed growth of 2 percent YoY to Rs 2.81 lakh crore in Q1FY23.

Axis Bank: Axis Bank and Citi Bank deal has received approval from the Competition Commission of India. Axis Bank has decided to acquire Citibank's India consumer business from Citibank N.A. and the NBFC consumer business from Citicorp Finance (India).

United Spirits: The company reported a massive 419 percent year-on-year growth in consolidated profit at Rs 261.10 crore for the quarter ended June 2022, aided by strong operating performance and topline growth. Revenue increased by 15.6 percent YoY to Rs 7,131.3 crore in the same period.

KEI Industries: The company reported a 54 percent year-on-year growth in consolidated profit at Rs 103.76 crore for June 2022 quarter, driven by strong operating performance and topline. Revenue during the quarter stood at Rs 1,565.41 crore, a 54 percent growth compared to Rs 1,017.56 crore in the same period last year.

Ethos: The company recorded a significant growth of 1,430 percent in consolidated profit at Rs 12.80 crore for the June 2022 quarter against Rs 0.84 crore in the same period last year, led by healthy operating performance and topline. Revenue at Rs 173.56 crore grew by 95 percent over Rs 88.94 crore during the same period last year.

Fund Flow

FII and DII data

Foreign institutional investors (FIIs) have net sold shares worth Rs 1,548.29 crore, whereas domestic institutional investors (DIIs) net bought shares worth Rs 999.36 crore on July 26, as per provisional data available on the NSE.

Stocks under F&O ban on NSE

Two stocks - Delta Corp, and Indiabulls Housing Finance - are under the NSE F&O ban list for July 27. 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.