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Nifty Outlook

Markets started the week on a buoyant note and gained nearly one and a half percent, tracking firm global cues. After the gap-up start, the benchmark gradually inched higher as the day progressed and finally settled around the day’s high. All the sectors, barring the defensive i.e. FMCG and pharma, contributed to the move. The broader markets too ended in the green in the range of 1.4-1.7%. Consequently, the Nifty ended with a positive bias near day’s high at 16,280 levels, up by 1.4%.

Markets are largely mirroring their global counterparts, especially the US while domestic factors like macroeconomic data and earnings cause volatile swings in between. Amid all, we reiterate our positive yet cautious view as we’re eyeing the 16,300-16,500 zone in Nifty. Participants should focus more on stock selection and overnight risk management.

News

* HCL Technologies announced that it has signed a multi-year deal with DSM, (a purpose -led science-based global leader in health, nutrition and bioscience) to accelerate the digital transformation of the company with a cloud-first strategy, agile delivery and next generation security and network practice.

* Jindal Stainless announced that it will provide stainless steel of 3,500 MT for the construction of the Udhampur-Srinagar-Baramulla Rail Link Tunnel Project. This prestigious project of national importance by the Indian Railways is a 272 km-long railway link in Jammu and Kashmir and the first-ever application of stainless steel cable trays in an Indian railway project.

* Zydus Lifesciences subsidiary Zydus Worldwide DMCC has received final approval from the USFDA to market Efinaconazole Topical Solution, 10%. (US RLD: Jublia®). It is an azole antifungal used for the topical treatment of Onychomycosis of the toenails due to Trichophyton rubrum and Trichophyton mentagrophytes. The drug will be manufactured at its Ahmedabad, India facility.

Derivative Ideas

NIFTY gained 1.43% and closed at 16278.5 on 18th July. The index after opening with a gap managed to hold gains and closed near day's high. The move happened on the back of Short Covering in its FUTS and heavy PE writing. 16200 PE added 113000 odd contracts making 16150-16200 the level to watch out for support for this weekly expiry. We expect NIFTY to hold the support and trade positive in the range of 16150-16500 in the short term. We thus suggest selling PE as per the given levels.

Strategy:- SELL NIFTY 21 JUL 16000 PE@34-36, STOP LOSS 50, TARGET 5.

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