Technically, the market seems to be maintaining a consolidation phase for a few more sessions before getting into a firm trend on either side of the 21,650-21,850 range, experts said, adding if the index decisively surpasses 21,800-21,850 then 22,000 can’t be ruled out. However, if it breaks the 21,650 mark, which has been held for the last three sessions can drag down the index to the 21,500 mark, they added.
On January 1, the benchmark indices hit a new high but failed to sustain those higher levels due to profit-taking and finally ended flat with a positive bias. The BSE Sensex was up 32 points at 72,272, while the Nifty 50 gained 10.5 points at 21,742 and formed a Spinning Top or High Wave kind of candlestick pattern on the daily charts, indicating indecision among buyers and sellers about further market trend.
“This indicates high volatility in the market at the highs. The positive chart pattern like higher tops and bottoms is intact on the daily chart and Nifty is currently forming a new higher top of the sequence. Still, there is no confirmation of any top reversal pattern in the high market,” Nagaraj Shetti, senior technical research analyst at HDFC Securities said.
He feels the near-term uptrend status of Nifty remains intact. “A decisive move above 21,850 levels is expected to nullify the present bearish effect and that could open more upside for the near term. Immediate support is placed at 21,550 levels,” Shetti said.
Deven Mehta, equity research analyst at Choice Broking also feels the index has support around the 21,600-21,500 zone.
Meanwhile, the broader markets remained strong with the Nifty Midcap 100 and Smallcap 100 indices climbing 0.6 percent and 0.5 percent, respectively.
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Key support and resistance levels on the Nifty
The pivot point calculator indicates that the Nifty is likely to see immediate resistance at 21,811 followed by 21,847 and 21,906 levels, while on the lower side, it can take support at 21,694 followed by 21,657 and 21,599 levels.
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On January 1, the Bank Nifty fell further by 58 points to 48,234 and formed a High Wave kind of candlestick pattern on the daily charts, but maintained the 48,000 mark throughout the session.
The banking index has got stuck in a wider range in between 47,800 and 48,500 zones from the past few sessions and momentum is missing at either side.
“Till it holds above 48,000 mark, it can witness an up move towards 48,500 then its recent life high of 48,636 zones, while on the downside support is expected at 48,000 then 47,750 levels,” Chandan Taparia, senior vice president | analyst-derivatives at Motilal Oswal Financial Services said.
As per the pivot point calculator, the Bank Nifty is expected to see resistance at 48,398 followed by 48,494 and 48,649 levels, while on the lower side, it may take support at 48,088 followed by 47,992 and 47,837 levels.
As per the weekly options data, the 22,000 strike continued to own the maximum Call open interest with 71.52 lakh contracts, which can act as a key resistance level for the Nifty in the short term. It was followed by the 22,500 strike, which had 69.24 lakh contracts, while the 22,400 strike had 61.69 lakh contracts.
Meaningful Call writing was seen at the 22,400 strike, which added 35.46 lakh contracts followed by 21,900 and 22,200 strikes, which added 21.01 lakh and 15.78 lakh contracts, respectively.
The maximum Call unwinding was at the 23,000 strike, which shed 1.93 lakh contracts followed by 22,700 and 21,500 strikes, which shed 1.69 lakh and 68,100 contracts.
On the Put front, the maximum open interest was seen at 21,700 strike, which can act as a key support area for the Nifty with 70.74 lakh contracts. It was followed by 21,000 strike comprising 66.93 lakh contracts and then at 21,500 strike with 55.03 lakh contracts.
Meaningful Put writing was at 21,700 strike, which added 25.88 lakh contracts followed by 21,000 strike and 21,600 strike, which added 21.07 lakh contracts and 18.52 lakh contracts, respectively.
The Put unwinding was seen at 21,500 strike, which shed 7.23 lakh contracts, followed by 20,500 strike, which shed 3.42 lakh contracts, and then at 20,700 strike, which shed 2.67 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. Muthoot Finance, Abbott India, Godrej Consumer Products, PI Industries, and ICICI Prudential Life Insurance Company saw the highest delivery among the F&O stocks.
A long build-up was seen in 53 stocks, which included Delta Corp, Balrampur Chini Mills, Gujarat Gas, Zydus Lifesciences and Granules India. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, 42 stocks saw long unwinding, including Bharti Airtel, Apollo Tyres, GMR Airport Infrastructure, Bajaj Auto and Colgate Palmolive. A decline in OI and price indicates long unwinding.
47 stocks see a short build-up
A short build-up was seen in 47 stocks including Eicher Motors, Abbott India, Birlasoft, Ramco Cements and L&T Technology Services. An increase in OI along with a fall in price points to a build-up of short positions.
Based on the OI percentage, 44 stocks were on the short-covering list. This included Tech Mahindra, United Breweries, Bank of Baroda, ACC and MRF. A decrease in OI along with a price increase is an indication of short-covering.
The Nifty Put Call ratio (PCR), which indicates the mood of the equity market, rose to 1.14 on January 1, from 1.12 levels in the previous session. The above 1 PCR indicates that the traders are buying more Puts options than Calls, which generally indicates an increase in bearish sentiment.
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Stocks in the news
Asian Paints: Life Insurance Corporation of India has increased its shareholding in Asian Paints by 48,652 equity shares, from 4.995 percent to 5.000 percent of the paid-up capital of the said company.
Eicher Motors: The Royal Enfield sold 63,387 motorcycles in December 2023 down by 7 percent from 68,400 motorcycles in the same month in 2022. Exports declined 29 percent to 6,096 motorcycles from 8,579 units during the same period.
Life Insurance Corporation of India: The Corporation has received demand order of Rs 806.3 crore for collection of GST along with interest and penalty for Maharashtra state, from the Deputy Commissioner of State Tax, Mumbai. The demand order cum penalty notice is for FY2017-18 including GST of Rs 365 crore and penalty of Rs 404.77 crore.
Power Grid Corporation of India: Power Grid was declared as the successful bidder to establish an inter-state transmission system for evacuation of power from REZ in Rajasthan (20GW) under Phase-III Part D – Phase I, on build, own operate and transfer (BOOT) basis.
TVS Motor Company: The two-and-three-wheeler company recorded monthly sales of 3,01,898 units in December 2023 registering a growth of 25 percent as against 2,42,012 units in the same period in 2022. Its total exports grew by 8 percent year-on-year to 85,391 units in December 2023.
Kernex Microsystems (India): The joint venture company, VRRC-KERNEX-CE-RVR JV, has received an order worth Rs 109.46 crore from South Central Railway for comprehensive signalling and telecommunication works for the provision of an automatic block signalling system.
G R Infraprojects: The company emerged as a successful bidder and has received a Letter of Intent for “transmission system for evacuation of power from RE projects in Rajgarh (1000 MW) SEZ in Madhya Pradesh- Phase II, through tariff-based competitive bidding process (TBCB), with annual transmission charges of Rs 41.9 crore.
Funds Flow (Rs crore)
Foreign institutional investors (FIIs) sold shares worth Rs 855.80 crore, while domestic institutional investors (DIIs) purchased Rs 410.46 crore worth of stocks on January 1, provisional data from the NSE showed.
Stock under F&O ban on NSE
The NSE has added Balrampur Chini Mills to its F&O ban list for January 2, while retaining Hindustan Copper 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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