Pre-market disclosure July 4, 2024, Thursday: Thanks to strong Asian cues and aggressive long bets by FIIs in the derivatives market, the BSE Sensex and the NSE Nifty are set to reach new heights in opening trades.
GIFT Nifty futures quoted at 24,460 levels at 7:00 AM, suggesting a possible gap-up of about 100 points or so on the Nifty 50 index.
worldwide attitude
The US market finished the night on a mixed note, with tech equities driving the S&P 500 and NASDAQ to new all-time highs. The NASDAQ increased by 0.9% and the S&P 500 gained 0.5%. However, the Dow Jones finished today’s trading holiday 0.1% lower. The market will look to the jobs report on Friday for clues.
The US economy appeared to be slowing, and that “price pressures were diminishing,” according to minutes of the Federal Reserve meeting that just ended. However, officials sought more information before committing to interest rate decreases.
At 4.356 percent, the yield on US 10-year bonds decreased. In the commodities market, Brent Crude Oil futures held steady at $87 per barrel, while Gold futures increased to $2,370 per ounce.
The Asia-Pacific region’s markets saw significant increases in early trading. Both Malaysia’s Kospi and the Australian stock indices, the S&P ASX 200 and All Ordinaries, had a 1% increase. Nikkei gained 0.4% on each day.
Flows II and DII
On Wednesday, net purchases by foreign institutional investors (FIIs) totaled Rs 5,484 crore. On July 2, however, shares were net sold by domestic institutional investors (DIIs) for a total of Rs 924 crore.
FIIs net purchased index futures in the derivatives market for a total of Rs 2,487.34 crore. Yesterday, net buyers of Bank Nifty futures and FIIs added 2,599 contracts in Nifty futures.
The long-short ratio of the FIIs index surged to 5.1:1, which indicates that for every short position in index futures, there are more than five long index bets. The FIIs net index showed 83.62 percent of long positions and 16.38 percent of short positions.
However, the index long-short ratio for DIIs and retail investors is around 0.5:1, which means that for every long trade, there are almost two index short holdings.
Trading plan for July 4th, Thursday: Is it the right time for you to purchase or sell in the Nifty, Bank Nifty? Here’s what industry insiders advise:
Asit C. Mehta Investment Intermediates’ AVP of Technical and Derivatives Research, Hrishikesh Yedve
Technically speaking, the Nifty has produced a doji candlestick pattern and broken through the 24,200 barrier. In addition, an upward trend is indicated by the index’s formation of a higher-top, higher-bottom pattern. As long as the index maintains its 23,990 level of support, it might try to test the 24,500–24,600 levels.
A consolidation of the Nifty Bank is taking place between 52,000 and 53,200. The rise may continue to 54,000–54,200 levels if the index holds above 53,200.
Ashwin Ramani works for SAMCO Securities as a technical and derivatives analyst.
Nifty experienced strong put writing near the 24,200 Strike and call writing at the 24,300 Strike, resulting in day-long volatility in the index. The market looks hot with a put-call ratio (PCR) of 1.45 and an FPI long-short ratio of 82%. As such, it is best to proceed with caution while constructing aggressive new long holdings.
At the 24,300 strike, the put writers (1.78 lakh contracts) are trailed by the call writers (3.55 contracts), and the option activity during this strike will reveal clues about the future direction of Nifty.
The Bank Nifty’s significant upward advance on Wednesday was driven by call writers, or Bears, leaving and entering all strikes from 52,000 to 53,000.
The 53,000 Strike saw a large amount of put writing. At the 53,000 strike, the put writers, or Bulls, have 92K contracts, a little advantage over the call writers, or Bears, who have 76K contracts. The option activity during this strike will reveal clues regarding the future direction of the Bank Nifty.
Om Mehra, SAMCO Securities Technical Analyst
The Nifty has continuously maintained its upward trend over the last eight trading sessions, never closing below the low of the prior day. The Nifty’s support levels are still at 24,100, but if it breaks 24,330, it might move higher and aim for the 24,400–24,500 range.
For the Bank Nifty, the 9-day moving average (DMA) at 52,400 acts as an instant support level. The Fibonacci retracement levels of 127.8% (53,550) and 161.8% (53,900) indicate resistance on the upswing. With a positive value of 67, the daily Relative Strength Index (RSI) shows a persistent bullish trend.
Senior Technical Analyst at LKP Securities, Rupak De
The index has crossed over 24,300 as the bulls have taken back the upper hand over the bears. This change in mood has helped long positions in the market once more. Going ahead, if the Nifty maintains over 24,000, the trend may continue to be robust in the near future. The index may rise to 24,500 on the top end. A decline below 24,000, though, might cause the index to consolidate.
Senior Technical and Derivative Analyst at LKP Securities, Kunal Shah
On the daily chart, the Bank Nifty is showing signs of a robust uptrend, with higher high and higher low patterns. The current immediate support is at 52,500, and a pullback towards this level would be a perfect time to start new long bets.
primary market report
With 1.32 times subscription on Day 1 of the offer period, Emcure Pharma’s Rs 1,952 crore IPO went through without a hitch. The non-institutional investors (NIIs) category exhibited keen interest.
SME: 1.76 times as many people subscribed to Bansal Wire’s Rs 745 crore IPO. On Day 1 of the offer period, bidding for NIIs and the retail category reached up to 2.5 times the allocated quota.