Trade Setup For July 10: Nifty Set To Test New Record High

Indian equities are expected to maintain their upward trajectory heading into the first quarter earnings season on Wednesday, with support broadly at the 24,160 level for the benchmark Nifty 50 and a sight towards 24,600.

The Nifty is forming a higher top-higher bottom formation, indicating a strong uptrend, according to Hrishikesh Yedve, AVP-technical and derivatives research at Asit C Mehta Investment Intermediates Ltd.

The short-term swing support for the index is placed near 24,168, and the benchmark could test levels of 24,500–24,600. Therefore, a "buy on dips" strategy should be adopted in the short term, Yedve said.

While the overall sentiment remains positive without signs of weakness, the market appears overbought by various measures, said Rajesh Bhosale, equity technical analyst at Angel One Ltd.

He said the key levels to watch for in the benchmark are 24,600–24,650, the golden ratio retracement of the panic fall seen during the election day results. On the downside, immediate support is at 24,330, followed by 24,160.

"Defensive sectors like FMCG and pharma have been favoured in recent sessions, and auto stocks have also shown strength," Bhosale said. "Traders should focus on these areas for better momentum and risk-reward compared to the main indices."

For the Bank Nifty, the 50,200 mark is crucial at a time when the index faces volatility. “As long as 50-1000, 50,200 is held, you should consider a long position on Bank Nifty; there is a very tight stop-loss,” Kush Bohra, founder of the investment platform Kushbhora.com, told NDTV Profit.

Despite HDFC Bank Ltd. and State Bank of India dragging the index, he still sees support. “Even if they stem the fall, the likes of ICICI Bank Ltd. and Axis Bank Ltd. will perhaps jump in, and you could see some sort of up-move closer to 53-300 or even 53-800 levels,” he said. 

The Bank Nifty has formed a bullish engulfing candle near the lower end of short-term consolidation, according to Mehta.

The GIFT Nifty was trading 22.5 points, or 0.09%, higher at 24,487 as of 06:37 a.m.

The Nifty July futures are up 0.45% to 24,485.65 at a premium of 52.45 points, with open interest up by 1.64%.

Nifty Bank July futures are up by 0.11% to 52,615.75 at a premium of 46.95 points, while its open interest is down by 0.34%.

The open interest distribution for the Nifty 50 July 11 expiry series indicated most activity at 25,000 call strikes, with 24,000 put strikes having maximum open interest.

For the Bank Nifty options July 10 expiry, the maximum call open interest was at 55,000 and the maximum put open interest was at 51,000.

Overseas investors stayed net buyers of Indian equities for the fifth consecutive day on Thursday. Foreign portfolio investors mopped up stocks worth Rs 314.46 crore, according to provisional data from the National Stock Exchange.

Domestic institutional investors stayed net buyers for the second session and bought equities worth Rs 1,416.46 crore, the NSE data showed.

India's equity benchmark indices rebounded sharply to end at a record high on Tuesday as shares of Maruti Suzuki India Ltd. and ICICI Bank Ltd. led gains. The NSE Nifty 50 settled 112.65 points, or 0.46% higher at 24,433.20, and the S&P BSE Sensex ended up 391.26 points, or 0.49% at 80,351.64.

Intraday, Nifty rose 0.51% to a fresh high of 24,443.60, and Sensex rose 0.55% to 80,397.17.

Broader markets ended higher but underperformed benchmark indices. The S&P BSE Midcap ended up 0.36% and the S&P BSE Smallcap gained 0.22%.

On BSE, 15 out of 20 sectors advanced and five declined. S&P BSE Consumer Durables was the best-performing sector, while S&P BSE Telecommunication was the worst-performing sector.

• Infosys: The IT major signed a 5-year deal with Sector Alarm to develop financial and business operating models through cloud-based enterprise resource planning.

• Mahindra and Mahindra: The automaker reduced the prices of top-end variants of the XUV700 SUV by almost Rs 1 lakh. The “celebratory” pricing is for four months only.

• JSW Steel: The consolidated crude steel production fell 1% year-on-year and 6% sequentially in the first quarter to 6.35 million metric tonnes.

• RVNL: The company emerged as the lowest bidder for the Rs 203 crore railway contract from South Eastern Railway.

• Delta Corp: The company reported a 68% decline in net profit to Rs 22 crore and a 30% drop in revenue to Rs 181 crore in the June quarter. It announced a dividend of Rs 1.25 per share.

Asia-Pacific shares were down in early trade on Wednesday defying the record close of their Wall Street peers while traders await key inflation data in China.

Shares in Japan and Australia declined the most, while South Korean shares were marginally down. The S&P ASX 200 was 45 points or 0.57% lower at 7,785 while the Kospi was 2.63 points or 0.09% down at 2,865 as of 06:22 a.m.

China's consumer price index and producer price index data will be released later in the day while the Reserve Bank of New Zealand will announce its key policy rate decision on Wednesday.

Meanwhile, the US stocks closed at an all-time high on Tuesday after the US Federal Reserve's chair maintained a balanced stance in his testimony to the Senate Banking Committee.

Elevated inflation is not the only risk the US markets face and the labour market is strong but not overheated, Jerome Powel said. The chair avoided giving any timeline for the rate cuts but added that "more good data" would boost confidence on inflation's trajectory.

The S&P 500 Index and Nasdaq Composite advanced 0.07% and 0.14%, respectively as of Tuesday. Dow Jones Industrial Average slipped 0.13%.

Brent crude was trading 0.22% higher at $84.85 a barrel. Gold was 0.04% up at $2,365.1 an ounce.

• U.S. Dollar Index at 105.11

• U.S. 10-year bond yield at 4.29%

• Brent crude up 0.22% at $84.85 per barrel

• Bitcoin was down 0.42% at $57,682.62

• Gold spot was up 0.04% at $2,365.1

The Indian rupee closed flat against the U.S. dollar on Tuesday amid a decline in the price of crude oil. The local currency closed at Rs 83.49 against the greenback; it had opened at the same value, according to Bloomberg.