Mutual funds have been betting big on IPOs in the last couple of months. The last quarter has seen big-ticket IPOs hitting the market. Some mutual fund houses have gone big on these IPOs while many others have stayed away from them.
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Analysts said that the August series trend will be dictated by corporate earnings and the monsoon session of the Parliament. But unless the financials start gaining, the index will struggle to go beyond 16,000-16,100.
They see the index moving in a range of 15,400-16,000 in the immediate term, with the metal index possibly gaining 8-10% more after breaking out of a 13-year price range.
Nifty and Sensex ended the July series with a 0.1% loss. The Nifty Real Estate index gained 15% and Metal index gained 14%. The Auto index was the worst performer with a loss of 6%. Bank Nifty fell 0.4% during July series.
What should investors do?
Within Nifty there will be sectorial level rotations and we expect underperformance from the banking index as Bank Nifty has significant resistance at 36,000; meaningful upsides would happen only if the Bank Nifty is able to take out this level. Traders can initiate short strangle option strategy in Nifty by selling 15,700 put and 16,150 call for July 22 weekly expiry. Among stocks, MCX can be bought for a 25% upside/10% stop loss for the next 3-4 months as the price has exceeded the falling channel pattern with a bullish candle on a volume surge indicating strong breakout.
Rahul Sharma, Head, Techniical & Derivatives Research, JM Financial
Read more about New Reliance Industries partly paid shares commence trading on NSE on Business Standard. Trading in the earlier version of RIL PP shares was suspended on May 11.