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Nifty Outlook

Markets gained over half a percent amid volatility and settled closer to the day’s high. The beginning was subdued however healthy buying in sectors such as FMCG, financials and banking helped the index to inch gradually higher as the day progressed. Consequently, the Nifty closed at 15,835.35 levels; up by 0.5%. The broader indices also traded in tandem with the benchmark and ended higher.

Indications are in favor of a further rebound in the index, thanks to fresh buoyancy in the banking and financial pack. However, supportive global cues would continue to play a critical role in any sustained up move. We reiterate our cautious stance and suggest continuing with sector-specific trading approach.

News

* Tata Power announced that it has signed a MoU with the Tamil Nadu Government to invest ~Rs 3,000cr for setting up a greenfield 4GW Solar Cell and 4GW Solar Module manufacturing plant in Tirunelveli District of Tamil Nadu.

* EaseMyTrip announced that it has expanded its international footprint by incorporating a wholly-owned foreign subsidiary in New Zealand as part of its global expansion strategy. The company has forayed into New Zealand anticipating a huge pent-up global demand for the travel and tourism sector in the coming months.

* Emami announced that it has further raised stake from 72.02% to 77.53% in Brillare Science Pvt Ltd. (the Subsidiary Company).

Derivative Ideas

NIFTY gained 0.53% and closed at 15835.35 on 4th July. The index after finding the support at 15650 levels saw a good up move during intraday on the back of PE writing at 15700 and addition of Fresh Longs in its FUTS. The data suggests base formation around 15500-15650 levels at least for the short term. We expect NIFTY to test its hurdle at 16050-16200 in coming sessions and thus suggest selling PE as per the given levels.

Strategy:- SELL NIFTY 7 JUL 15400 PE@28-30, STOP LOSS 45, TARGET 5.

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