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This article was written by

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The Nifty enters the new trading week with momentum on its side after outperforming most Asian peers on Friday and breaking out of its recent consolidation range. Analysts expect the rally to extend towards 24,500-24,750, with some seeing the potential for 25,000, although they believe the index must first overcome resistance around the 24,350-24,600 zone. The index closed at 24,334 on Friday.

NAGARAJ SHETTI
SENIOR TECHNICAL RESEARCH ANALYST, HDFC SECURITIES

Trading Strategies
One may look to buy Bank Nifty July Futures around 58,591-58,500 for an upside target of 59,600 by the July 28 expiry. Place a stop loss at 58,000. One may buy the Nifty 24,500 CE of the July 28 expiry around 137-125 for a target of 250. Place a stop loss at 75. TOP STOCK PICKS
Bajaj Finance: Buy at Rs 1,055 | Target: Rs 1,115 | Stop loss: Rs 1,020 | Timeframe: 1-2 weeks

The stock is poised for a breakout above previous highs, supported by robust volumes and a positive daily RSI. Sona BLW
Precision Forgings: Buy at Rs 705 | Target: Rs 752 | Stop loss: Rs 680 | Timeframe: 1-2 weeks
Bullish chart structure, strong breakout volumes and a positive daily RSI support the uptrend.

Also Read: D-St set for a negative opening as GIFT Nifty signals weak start

MEHUL KOTHARI
DVP – TECHNICAL RESEARCH, ANAND RATHI SHARE AND STOCK BROKERS

Trading Strategy
While the broader trend remains positive, the outlook is cautious until the Nifty decisively clears the immediate resistance zone of 24,350- 24,400. Until then, traders can consider a hedged short strategy: Sell Nifty July Futures around 24,350 Buy 24,300 Call Option (Monthly Expiry) as a hedge. The maximum risk on the strategy is expected to be around Rs 12,000 per lot.

Exit Strategy:
Stop Loss: Exit on a decisive move above 24,500. Target: Book profits if the index revisits the 24,000 support zone.

TOP STOCK PICKS

EPACK Durable: Buy at Rs 240-244 | Target: Rs 275 | Stop loss: Rs 225 | Timeframe: 1-3 months

The stock‘s technical setup has improved after moving above the Ichimoku conversion and base lines, while momentum indicators have also turned positive.

Endurance Technologies: Buy at Rs 2,770-2,800 | Target: Rs 3,100 | Stop loss: Rs 2,620 | Timeframe: 90 days

It has confirmed a bullish breakout from an Ascending Triangle pattern, reinforcing the strength of the prevailing uptrend. The stock continues to trade above the Ichimoku Cloud with improving momentum, indicating the potential for further gains.

Read more: Select mid & smallcaps on a roll, but broader market lags

SACCHITANAND UTTEKAR
VP – RESEARCH (TECHNICAL & DERIVATIVES), TRADEBULLS SECURITIES

Trading Strategy
For the Nifty to unlock meaningful directional momentum, the index must reclaim the 24,350- 24,400 resistance zone. A sustained breakout above this range would reaffirm that the broader market structure remains intact and open the possibility of an upmove towards 24,740-24,950 during the current July series.

On the downside, a decisive close below 23,800 would weaken the technical structure and increase the probability of an extended corrective phase.

Deploy a Bull Call Spread: This strategy is suitable for a moderately bullish view, with the expectation that the Nifty will sustain above 24,300 and potentially move towards 24,600 during the expiry period.

Buy: 1 Lot Nifty 24,350 Call @ Rs 115 Sell: 1 Lot Nifty 24,600 Call @ Rs 26 Net Premium: Rs 89 | SL Below: 62 | TGT: 160 Maximum Profit: Rs 161 points (250-point spread − Rs 89 net premium) Maximum Loss: Rs 89 points (Net premium paid) Breakeven: 24,439 (24,350 + Rs 89)

TOP STOCK PICKS
ABB India: Buy at Rs 7,506 | Target: Rs 8,180 | Stop loss: Rs 7,354

The stock has witnessed a fresh breakout from a Bullish Pennant pattern on the weekly chart, with the RSI displaying a strong positive crossover, another positive sign for directional momentum.

State Bank of India: Buy at Rs 1,044 | Target: Rs 1,080 | Stop loss: Rs 1,036

The Piercing Line bullish reversal pattern confirms Rs 1,000 as a key support. RSI above 50 suggests momentum is building towards the Rs 1,080 target.

ET Intelligence Group: The early June quarter earnings trend has been marked by double-digit growth in revenue and profit, driven largely by most of the big banks and stable year-on-year performance by the IT pack.

For a common sample of 164 companies, revenue grew 17.5% on a low base a year ago, the fastest in at least nine quarters.

Net profit rose 14.5% year-on-year, marking a second consecutive quarter of double-digit growth. In the year-ago period, revenue and profit had risen by 4.7% and 11.5%, respectively.

The sample’s operating margin was under pressure due to higher input costs.

Operating Margin Contracts

For the total sample, operating margin contracted to 20.9% in the June quarter from 26.9% in the year-ago quarter. Excluding lenders, the sample’s operating margin fell to 14.7% from 17.3% by a similar comparison. The proportion of raw material cost in sales for the truncated sample shot up to 33.3% from 29.8% a year ago, reflecting input price inflation due to geopolitical conflict.
Read more: Refining gains, clean energy push lift Reliance outlook despite retail drag

Some banks and finance companies reported strong numbers, boosting overall net profit growth. Excluding lenders, the sample’s net profit growth shrank to just 1.2%. The share of banks and finance companies in the total sample’s net profit rose to 56.9% in the June quarter from 51.3% a year ago.The total sample’s profit growth was muted by Reliance Industries Ltd (RIL) numbers. Net profit at the country’s largest company by revenue and market cap fell 22.4% year-on-year to Rs20,946 crore. Excluding RIL, the sample’s net profit surged to 24.1%. The lower profit was attributable to an exceptional gain of Rs 8,924 crore recorded in the year-ago quarter on the sale of RIL’s stake in Asian Paints.

At the beginning of the results season, analysts had anticipated double-digit growth in the aggregate net profit of the Nifty 50 companies, aided by banks and finance companies. “The overall earnings growth is anticipated to be healthy, anchored by financials, metals, and capital goods companies,” Motilal Oswal Financial Services said in a preview report.

Clarity on the financial trend will emerge as more companies from across sectors declare quarterly numbers in the coming weeks.

Read more: Nifty ready for 24,500-24,750 levels after breakout rally: Analysts

Oil prices surged more than 3% on Monday, pushing Brent crude above the $90-a-barrel mark, after the United States and Iran intensified military attacks in the Middle East, disrupting energy shipments through the Strait of Hormuz.

Crude oil price on July 20

Brent crude futures rose $2.69, or 3.05%, to $90.79 a barrel, their highest level since June 11. The benchmark extended last week’s rally, when it gained 15.9%, marking its biggest weekly advance since April. U.S. West Texas Intermediate (WTI) crude climbed $2.19, or 2.65%, to $84.68 a barrel, the highest since June 12. Front-month WTI prices had jumped 15.5% last week, their strongest weekly gain since early March.

Tensions in the Middle East worsened over the weekend as the U.S. carried out a ninth consecutive night of strikes on Iran, while U.S. allies Kuwait and Bahrain reported fresh Iranian attacks.

Also read: A dangerous new phase of war? Iran’s military is being hit ‘very hard’, says Donald Trump
Both sides have increasingly targeted shipping activity in recent days. The U.S. said it is enforcing a naval blockade on Iranian ports, while Iran said it is targeting vessels that violate its navigation rules in the Strait of Hormuz, a vital waterway that typically carries around one-fifth of global oil trade. Separately, the United Kingdom Maritime Trade Operations agency reported that a vessel was on fire northwest of Oman’s Kumzar early on Monday.”The coming days and weeks will provide a clearer picture of the sustainable level of oil exports from the region under renewed dual blockades,” Barclays analyst Amarpreet Singh said in a note.

What are experts saying? Goldman Sachs said Brent crude could climb above $110 a barrel in the fourth quarter if the recovery in Gulf exports remains delayed. However, the investment bank expects prices to retreat into the $60s by the end of the year if geopolitical tensions ease and production recovers more quickly than anticipated.
“At the current point there are no signs of a ceasefire again. But in case there is a ceasefire immediately imposed, we don’t expect Brent oil prices to fall beyond $70 per barrel. It is likely to remain the lower support for the near term,” Pranav Mer, Senior Vice President, Currency and Commodity at JM Financial, told ETMarkets.
Anindya Banerjee, Head of Commodity Research at Kotak Securities, said crude oil has once again started factoring in geopolitical risks. “Any strike on major Gulf export infrastructure could force a retest of $95-100 and beyond,” he said.

Also read:Oil is crude once again! Is $95 the new normal and what it means for Indian investors?

He added that the market is responding less to the military action itself and more to the fading prospects of diplomacy. He noted that Tehran has set fresh conditions for restarting negotiations, and every new development is delaying the return of normal tanker movement through the Strait of Hormuz, where traffic had already remained well below pre-war levels.

Nuvama Institutional Equities cautioned that a prolonged closure of the Strait of Hormuz could disrupt nearly 20 million barrels a day of crude oil flows. In such a scenario, it said oil prices could rise to between $110 and $150 a barrel.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)