NIFTY OUTLOOK & OPTION TRADING TIPS FOR 9 JUL 2024

Summary

Indian benchmark indices ended flat in a volatile session on July 8. The Sensex declined by 36 points or 0.05% to close at 79,960 while the Nifty slipped by 3 points or 0.01% to end at 24,320. The market experienced a range-bound session with mixed trends across various sectors.

Market Performance

• Sensex: Closed at 79,960, down by 36 points (0.05%)
• Nifty: Closed at 24,320, down by 3 points (0.01%)

Sectoral Performance

• Gainers:
  • FMCG
  • Energy
• Losers:
  • Metal
  • Realty
  • Pharma

Broader Indices

• The BSE midcap and smallcap indices ended marginally lower.

Market Analysis

The Nifty index traded within a narrow range and closed nearly unchanged. The market experienced rotational buying in heavyweight stocks, which limited the downside. There are ongoing buying opportunities in select sectors and themes, though traders should exercise caution in stock selection and prioritize effective trade management strategies.

Key Observations

• Resistance: The Nifty faced resistance from the zone of 24,370 – 24,500.
• Support: Strong support is at 24,240.
• Range Expectation: Nifty is expected to trade in the range of 24,100 – 24,400.

Bank Nifty

• Range Expectation: 52,000 – 53,500
• The Bank Nifty witnessed consolidation and is expected to continue trading within this range over the next few sessions.

Candlestick Pattern

• A Doji candlestick pattern was formed, indicating indecisiveness between bulls and bears. This suggests potential choppy trade in the coming sessions.

Sectoral Highlights

• Top Performers:
  • FMCG and Energy sectors.
• Laggards:
  • PSU Banks and Metal sectors.
• Star Performer:
  • The Railway segment surged over 5-6%.

Stock Performance

Top Nifty Gainers:

• ONGC
• ITC
• HDFC Life
• HUL
• Tata Consumer Products

Top Nifty Losers:

• Divis Labs
• Titan Company
• BPCL
• Shriram Finance
• Adani Ports

Sectoral Movement:

• Capital Goods, FMCG, Oil & Gas: Up 0.6-1.5%
• Auto, Bank, Healthcare, Metal, Realty, Power, Telecom: Down 0.4-0.8%

Market Sentiment

The market sentiment was influenced by weak Asian cues and stretched valuations. Investors are likely to maintain caution due to a lack of fresh triggers and the upcoming earnings season, which is anticipated to be subdued. The period of margin expansion appears to be concluding, potentially affecting earnings and valuations.

Conclusion

The Indian markets are entering a consolidation phase due to the absence of major triggers to support the current premium valuation. Investors are booking profits and preparing for the upcoming earnings season. The Nifty is expected to trade within a narrow range, with support at 24,240 and resistance at 24,400.