The market extended losses for the second consecutive session with the Nifty50 breaking the upward-sloping support trendline and remaining below the 50-day and 20-day EMA (exponential moving average) on October 4. This indicates the possible continuity in short-term weakness, and if the index stays below 19,500, then the fall may reach 19,200, the low of August, while the formation of a Doji-kind of candlestick pattern on the daily charts at the downtrend may increase the chances of bounce-back. And getting back above 19,500 can lift the index towards 19,600-19,700 levels in coming sessions, experts said.
The BSE Sensex plummeted 286 points to 65,226, while the Nifty50 declined 93 points to 19,436 and formed a small candle on the daily chart with almost identical open and close and with long lower shadow.
Technically, this pattern indicates the formation of a Doji or Hammer-type candle pattern. Normally, the formation of such patterns after a reasonable decline or at the key supports signals a comeback of bulls from the lower levels, after the confirmation. Hence, a sustainable close above 19,500 is expected to confirm a short-term upside bounce for the market, Nagaraj Shetti, technical research analyst at HDFC Securities said.
He feels that the short-term trend of the Nifty remains negative. “A decisive close above 19,500 levels could possibly open an upside bounce towards 19,650 levels in the near term. But, the inability to sustain the upside bounce or a decline below 19,330 is likely to trigger fresh weakness for the market ahead,” he said.
The Nifty Midcap 100 and Smallcap 100 indices have seen more correction than benchmarks, falling 1.4 percent and 1.25 percent respectively on weak breadth.
We have collated 15 data points to help you spot profitable trades:
Note: The open interest (OI) and volume data of stocks are the aggregates of three-month data and not just the current month.
Key support and resistance levels on Nifty
The pivot point calculator indicates that the Nifty may be taking support at 19,362, followed by 19,332 and 19,285. On the higher side, 19,457 can be an immediate resistance, followed by 19,486 and 19,533.
On October 4, the Bank Nifty closed below 44,000 mark for the first time since September, falling 435 points to 43,964 and formed a bearish candlestick pattern with minor upper and lower shadows on the daily charts.
“The bears in the Bank Nifty maintained their control, causing the index to break below the support at 44,200. The next immediate support level is positioned at 43,800, and a breach below this level could trigger aggressive selling pressure, potentially leading to a further 2 percent correction in the index,” Kunal Shah, senior technical & derivative analyst at LKP Securities said.
On the upside, he feels the immediate resistance is in the range of 44,250 to 44,300. A breakout above this range may incite some short-covering moves in the index, he said.
As per the pivot point calculator, the banking index is expected to take support at 43,878, followed by 43,806 and 43,690. On the upside, the initial resistance is at 44,110, then at 44,182 and at 44,298.
The weekly options data suggested that the maximum Call open interest (OI) was seen at 19,600 strike with 1.36 crore contracts, which can act as a key resistance for the Nifty. It was followed by the 19,500 strike, which had 1.058 crore contracts, while 19,700 strike had 1.057 crore contracts.
Meaningful Call writing was seen at 19,500 strike, which added 52.35 lakh contracts followed by 19,400 and 19,600 strikes, which added 51.66 lakh and 36.48 lakh contracts.
The maximum Call unwinding was at 20,000 strike, which shed 18.91 lakh contracts followed by 19,900 strike and 20,100 strike, which shed 15.45 lakh contracts and 6.26 lakh contracts.
On the Put side, the maximum open interest was at 19,400 strike with 1.16 crore contracts. This can be an important support for the Nifty in the coming sessions.
It was followed by 19,300 strike, comprising 1.04 crore contracts and 19,200 strike with 90.72 lakh contracts.
The meaningful Put writing was at 19,400 strike, which added 57.13 lakh contracts, followed by 19,300 strike and 19,200 strike, which added 56.74 lakh and 50.3 lakh contracts.
Put unwinding was at 19,500 strike, which shed 45.13 lakh contracts, followed by 19,600 strike and 19,700 strike, which shed 24.94 lakh and 6.58 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. Bharti Airtel, Coromandel International, UltraTech Cement, SBI Card, and ICICI Prudential Life Insurance Company have seen the highest delivery among the F&O stocks.
A long build-up was seen in 14 stocks namely, Escorts Kubota, Infosys, Navin Fluorine International, Ramco Cements, and HCL Technologies. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, a total of 60 stocks, including Coromandel International, L&T Technology Services, InterGlobe Aviation, NTPC, and Ipca Laboratories saw a long unwinding. A decline in OI and price indicates long unwinding.
98 stocks see a short build-up
A short build-up was seen in 98 stocks, including Axis Bank, State Bank of India, Siemens, Pujab National Bank, and Persistent Systems. An increase in OI along with a fall in price points to a build-up of short positions.
14 stocks see short-covering
Based on the OI percentage, 14 stocks were on the short-covering list. These included Eicher Motors, Adani Enterprises, Hindustan Unilever, Granules India, and Colgate Palmolive. A decrease in OI along with a price increase is an indication of short-covering.
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Investors meeting on October 5
Mahindra & Mahindra, Tilaknagar Industries, Deepak Fertilisers and Petrochemicals Corporation, Mrs Bectors Food Specialities, Schneider Electric Infrastructure, Cosmo First, Gati, Godawari Power and Ispat, and Divgi TorqTransfer Systems: Senior officials of the companies will be meeting analysts and institutional investors on October 5.
Stocks in the news
Hero MotoCorp: The world’s largest manufacturer of motorcycles and scooters has received 13,688 bookings for its newly launched flagship motorcycle, Karizma XMR. Dispatches of Karizma XMR to Hero MotoCorp dealerships have already started and customer deliveries will begin in the festive period this month.
JM Financial: Manish Sheth stepped down from the company as Chief Financial Officer with effect from September 30, 2023.
Punjab National Bank: The public sector lender has announced 11.3 percent year-on-year growth in total business at Rs 22.5 lakh crore for the quarter ended September FY24, with deposits rising 9.7 percent YoY to Rs 13.08 lakh crore and global gross advances increasing 13.8 percent YoY to Rs 9.4 lakh crore. CASA deposits grew by 2.6 percent YoY to Rs 5.4 lakh crore and domestic advances increased by 13.9 percent YoY to Rs 9.08 lakh crore.
Jammu & Kashmir Bank: The lender has reported total business at Rs 2,18,269 crore for the quarter ended September FY24, growing 12.03 percent over a year-ago period, with total deposits rising 9.4 percent YoY to Rs 1,26,589 crore and gross advances increasing 15.88 percent YoY to Rs 91,680 crore. CASA deposits rose 1.24 percent YoY to Rs 64,068 crore.
Marico: The FMCG major said domestic volumes grew in low-single digits on a year-on-year basis, with low single-digit volume growth in Parachute Coconut Oil and Saffola Edible Oils, and low single-digit value growth in Value Added Hair Oils. The International business delivered double-digit constant currency growth. Consolidated revenue was marginally lower YoY, dragged by pricing corrections in key domestic portfolios over the last 12 months, which will progressively come into the base going ahead. The company expects robust gross margin expansion YoY and expects healthy operating profit margin expansion leading to low double-digit operating profit growth.
Bandhan Bank: The private sector lender has reported loans & advances at Rs 1.07 lakh crore for quarter ended September FY24, growing 4.3 percent QoQ and 12.3 percent YoY, and total deposits grew by 3.3 percent QoQ & 12.8 percent YoY to Rs 1.12 lakh crore. CASA deposits increased by 10.5 percent QoQ and 6.5 percent YoY to Rs 43,161 crore, while retail deposits rose by 7.4 percent QoQ & 12.6 percent YoY to Rs 82,977 crore.
HealthCare Global Enterprises: The cancer care network announced the strategic acquisition of SRJ CBCC Cancer Hospital in Indore. HCG further plans to expand by adding 100 beds and state of art cancer diagnostic and treatment facility within an estimated operational timeline of 2 years. With this, HCG is now a network of 21 comprehensive cancer centres with 24 hospitals across India and Africa, and 8 Daycare centres.
Fund Flow (Rs Crore)
Foreign institutional investors (FII) offloaded shares worth Rs 4,424.02 crore, while domestic institutional investors (DII) purchased Rs 1,769.49 crore worth of stocks on October 4, provisional data from the National Stock Exchange (NSE) showed.
Stocks under F&O ban on NSE
The NSE has added Delta Corp, and Manappuram Finance to its F&O ban list for October 5, while retaining Indiabulls Housing Finance to the said list. Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.
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