After The Bell: A volatile Monday, what should investors do on Tuesday?

Market Outlook

Indian markets closed mixed after a volatile trading session on July 13 as the Nifty failed to hold on to 15,700 while the Sensex closed 13 points lower at 52,372. The Nifty50 closed three points higher at 15,692.

Sectorally, buying interest was seen in Realty, consumer discretionary, banks, and consumer durable stocks, while profit-booking was seen in telecom, IT, and power stocks.

The S&P BSE midcap index rose 0.4 percent, and the smallcap index was up 0.75 percent, outperforming the benchmark indices.

“Domestic indices started with mild gains hovering around the flat line, however, it trimmed early gains, tracking cues from its European peers ahead of the release of key inflation data later today,” Vinod Nair, Head of Research at Geojit Financial Services said.

“Shares of small finance banks were in focus today as the RBI allowed the reverse merger with their respective promoter entities. The realty stocks rallied as hopes of demand revival boosted the sector’s outlook,” he added.

India VIX moved up by 0.41 percent from 12.94 to 12.99 levels, the drop in VIX after a spurt in the last session gave some stability to the market.

On the options front, the maximum Put OI is at 15,500 followed by 15,000 strikes, while the maximum Call OI is at 16,000 followed by 15,800 strikes. Options data suggests an immediate trading range between 15,500 and 15,900.

Here’s what experts suggest investors should do on July 13:

Expert: Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services

The Nifty lost all its intraday gains and witnessed selling pressure in the second half towards 15,644 levels. It negated its lower high formation of the last three sessions but formed a Bearish candle on the daily scale.

Now, the index has to cross and hold above 15,750 to witness an up move towards 15,850 and 15,915, while on the downside, support exists at 15,600 and 15,500.

Gaurav Ratnaparkhi, Head, Technical Research, Sharekhan by BNP Paribas

With a gap-up opening, the Nifty attempted to scale above the key daily and hourly moving averages but couldn’t sustain in the higher territory and tumbled in the second half.

On the downside, the index again tested the swing low of 15,635, where the bulls offered support. Structurally, the index is forming a triangular pattern on the hourly chart and is expected to break out on the upside.

Thus, on the higher side, 15750-15790 will be the key hurdle zone to watch out for. Beyond that, the index is expected to march towards the subsequent barrier 15,900-15,915.

On the downside, the daily lower Bollinger Band and lower end of the reverse rising channel are also offering support. Hence, 15600-15650 will continue to act as a near-term support zone on a closing basis, which will keep the upside potential intact.

Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments

The index is struggling. It is unable to sustain at higher levels and hence makes a U-turn at any given instance.

We are still stuck in a range 15,400-15,900 range and unless either level is not taken out, we will not see a meaningful move.

Mohit Nigam, Head, PMS-Hem Securities

The benchmark indices erased all the day’s gains to close flat. Strong buying was seen in realty stocks with the Nifty realty gaining +3.61 percent. In absence of fresh triggers, the market remained rangebound.

The immediate resistance level for the Nifty is 15,900, while key support is 15,600. Result season has kicked off and we can see stock-specific action in the coming weeks.

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