Markets watchlist this week, July 14: F&O volumes plunge after SEBI bans Jane Street; key stocks like RIL and Adani in focus—read the latest market outlook now.Lack of momentum was the main story of last week, with none of the moves, be they up or down, appearing to gain speed. This was not surprising, given how the directional moving indicators were positioned on the Nifty. They continue to give similar signals despite downside support giving away, suggesting that even though Nifty’s 200-day Simple Moving Average (SMA) is over 4% below, we may not see that in a hurry.
Let us see how the broader market played out last week.
Jane Street saga and volumes
SEBI’s crackdown on Jane Street and the potential implications for other high-frequency traders hogged the headlines last week. Meanwhile, average daily contracts traded on the index option segment fell 78% when compared to last July.
Apparently, this decline in activity was not limited to the index option segment alone. While the number of trades on the NSE cash market was down 9.5% MoM and 28% YoY, the average daily contracts traded on the index futures declined by 82% YoY, stock futures down 53% YoY, and stock options declined by 33% YoY.
However, one could reason that unlike index options, where volumes are high on weekly expiry days, the index futures, stock futures, and stock options do not have weekly expiries. The bulk of their volumes usually happens on the monthly expiry day, which is yet to come, which could still raise their volumes for this month.
The hit on the cash market could be due to a flurry of IPOs sucking away interest and risk capital hitherto dedicated to the secondary market. That said, momentum is dull across the board, and volumes have slipped from the peaks.
The earnings season has also started with a whimper, with TCS seeing demand contraction. Meanwhile, Trump’s tariff threats continue to play on, spreading a cloud of uncertainty and clipping risk appetite. This was evident from Friday’s close, which saw just 53% of NSE 500 constituents closing above the middle Bollinger band and 73% ending below Thursday’s close.
Nifty Metal Index: Under pressure
The Nifty Metal index, which has been steadily climbing within a rising channel since May, now finds itself at a crucial juncture. It’s nearing the key support level of 9,230, aligned with both the channel’s lower trendline and the Supertrend indicator, making this level a potential tipping point for the next directional move.
Bearish sentiment is escalating from a derivatives standpoint: 46% of metal stocks have seen fresh short positions added on the daily timeframe, while 54% have done so on the weekly, suggesting mounting downside risk.
Leading constituents such as Adani Enterprises, JSW Steel, Hindustan Zinc, Hindalco, and Jindal Steel are exhibiting weakness through bearish candlestick formations, signalling heightened vulnerability.
Should the index close below the 9,230 support level, it could trigger accelerated selling and deepen the correction.
Nifty Oil & Gas Outlook: Strengthening bearish indicators point to further downside
The upward momentum seen since late June appears to be faltering, as this week’s profit booking has led to the formation of a strong bearish Marubozu candle on the daily chart, signalling a notable shift in sentiment. This downbeat tone is reinforced by the MACD’s bearish crossover, suggesting growing downside momentum.
Adding to the bearish narrative, a weekly bearish engulfing pattern has emerged, indicating that the index may slide toward the 11,660–11,620 range in the near term.
From a derivatives lens, nearly 60% of the stocks within the Oil & Gas index have seen fresh short positions on both daily and weekly timeframes, further cementing the bearish bias.
Major constituents like Reliance Industries and oil marketing giants IOC, BPCL, and HPCL have exhibited bearish candlestick formations—including shooting stars and bearish engulfing setups—making them vulnerable to deeper declines.
First published in Financial Express