The market has seen a correction for the first time in the last five consecutive sessions on June 8, after the RBI Monetary Policy Committee unanimously held the repo rate at 6.5 percent, in line with consensus expectations while retaining the withdrawal of accommodation stance by five out of six votes. Most of the sectors, barring metal, saw correction.
The BSE Sensex fell 294 points to 62,849, while the Nifty50 declined 92 points to 18,635 and formed a bearish candlestick pattern on the daily charts, which experts feel is the short-term reversal of the trend.
“A reasonable negative candle was formed on the daily chart with an upper shadow. Technically, this pattern indicates rejection of bulls at the highs and this could be considered as a short-term reversal pattern on the downside,” Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.
He feels Thursday’s swing high could be considered as a new higher top of the sequence and further weakness for the short term is expected to be a higher bottom of the sequence.
At the lows, Nifty could find cluster support like ascending trendline, 10-day and 20-day EMA (exponential moving average) around 18,560-18,450 levels, he said.
The broader markets also snapped rallies of several sessions as the Nifty Midcap 100 and Smallcap 100 indices fell 0.55 percent and 0.95 percent, respectively.
We have collated 15 data points to help you spot profitable trades:
Note: The open interest (OI) and volume data of stocks in this article are the aggregates of three-month data and not just the current month.
Key support, resistance levels on Nifty
The Nifty may get support at 18,614 followed by 18,576 and 18,514. If the index advances, then 18,738 will be the key resistance followed by 18,776 and 18,838.
We have also seen a correction in the Bank Nifty, which fell 280 points to 43,995 and formed a bearish candlestick pattern on the daily scale, following the RBI policy.
“In terms of support levels, the index has a support level positioned at 43,700. A breach below this support level might indicate a further downside potential and could attract additional selling interest from traders and investors,” Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said.
The index is stuck in a range and a break on either side will have a directional move, he feels.
As per the pivot point calculator, the Bank Nifty is expected to take support at 43,917, followed by 43,790 and 43,583, while the resistance is likely to be at 44,331, then 44,459 and 44,665.
On the weekly options front, the maximum Call open interest (OI) was at 18,700 strike, with 94.02 lakh contracts, which is expected to be a crucial resistance level for the Nifty.
This was followed by 18,800 strike comprising 89.61 lakh contracts and 18,900 strike with more than 74.74 lakh contracts.
The meaningful Call writing was seen at 19,200 strike, which added 7.56 lakh contracts followed by 18,700 strike, which added 6.42 lakh contracts and 19,400 strike, which added 5.1 lakh contracts.
Call unwinding was at 19,500 strike, which shed 31.45 lakh contracts followed by 18,900 strike, which shed 27.03 lakh contracts and 19,000 strike, which shed 19.28 lakh contracts.
On the Put side, the maximum open interest was at 18,600 strike with 1.27 crore contracts, which is expected to be an important support level in the coming sessions.
It was followed by the 18,500 strike, comprising 58.08 lakh contracts and the 18,000 strike, which has 39.81 lakh contracts.
Put writing was seen at 17,600 strike, which added 1.95 lakh contracts followed by 19,700 strike, which added 150 contracts.
Put unwinding was seen at 18,700 strike, which shed 98.18 lakh contracts followed by 18,500 strike, which shed 54.59 lakh contracts and 18,400 strike which shed 51.12 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. The highest delivery was seen in Coromandel International, Sun Pharmaceutical Industries, Voltas, Larsen & Toubro and Dr Reddy’s Laboratories among others.
An increase in open interest (OI) and price indicates a build-up of long positions. Based on the OI percentage, 11 stocks, including NTPC, Container Corporation of India, Hindustan Aeronautics, JSW Steel and Tata Chemicals saw long buildups
A decline in OI and price generally indicate a long unwinding. Based on the OI percentage, 92 stocks, including Glenmark Pharma, Tata Communications, JK Cement, India Cement and Britannia Industries saw a long unwinding.
69 stocks see a short build-up
An increase in OI along with a price decrease indicates a build-up of short positions. Based on the OI percentage, 69 stocks, including Indian Energy Exchange, Tech Mahindra, HDFC AMC, Deepak Nitrite and Indian Hotels saw a short build-up.
A decrease in OI along with a price increase is an indication of short-covering. Based on the OI percentage, 17 stocks were on the short-covering list. These included MCX India, Dixon Technologies, Larsen & Toubro, Hero MotoCorp and Bharat Forge.
Snowman Logistics: Gateway Distriparks acquired additional 14 lakh shares in the logistics company via open market transactions at an average price of Rs 43.32 per share. In the previous session too, Gateway Distriparks bought additional 11 lakh shares or 0.65 percent stake in Snowman Logistics.
United Drilling Tools: Ace investor Ashish Kacholia sold 1.58 lakh equity shares or 0.78 percent stake in the oilfield equipment manufacturer via open market transactions at an average price of Rs 190.49 per share. Kacholia held 5.7 lakh shares or a 2.81 percent stake in the company as of March 2023.
JHS Svendgaard Laboratories: Nikhil Vora and his wife Chaitali sold a 1.19 percent stake in the oral care products manufacturer via open market transactions. Nikhil has offloaded 3.91 lakh shares at an average price of Rs 19.21 per share, while Chaitali N Vora sold 3.83 lakh shares at an average price of Rs 18.2 per share.
(For more bulk deals, click here)
Investors Meetings on June 9
UltraTech Cement: Company’s officials will interact with Fidelity International and Nordea Asset Management.
Tata Motors: Officials of the company will meet Citadel.
Persistent Systems: The company’s officials will interact with ICICI Prudential MF.
eMudhra: Officials of the company will meet Sparx Group Asia.
Gokaldas Exports: Company’s officials will interact with Avvashya Capital.
Polycab India: Officials of the company will participate in a non-deal roadshow in San Francisco.
Ajmera Realty & Infra India: Company’s officials will meet Sharekhan and Karma Capital.
Home First Finance Company India: Officials of the company will attend Motilal Oswal BFSI Day: Emerging Stars.
Indian Energy Exchange: Company’s officials of the company will meet Old Bridge Capital.
Tata Steel: Officials of the company will meet Fidelity (FMR).
Stocks in the news
Kotak Mahindra Bank: Canada Pension Fund is likely to sell a 1.66 percent stake in the private sector lender, reports CNBC-TV18 quoting sources. The deal size may be around $754 million. Canada Pension Plan Investment Board holds a 4.34 percent stake or 8.63 crore shares in the bank as of March 2023.
Biocon: The Active Pharmaceutical Ingredient (API) manufacturing facility in Bengaluru received a certificate of GMP (good manufacturing practice) compliance from the Competent Authority of Germany. The said Bengaluru facility underwent an EU GMP inspection in February 2023.
Hindustan Aeronautics: The state-owned defence company said the meeting of the Board of Directors will be held on June 27 to consider a proposal for the sub-division of equity shares. Hence, the trading window for trading in the securities of the company will remain closed for all insiders, including designated persons, connected persons and their immediate relatives from June 9 till 48 hours after the declaration of the outcome of the board meeting.
Tata Power: Tata Power Renewable Energy through its subsidiary TP Vardhaman Surya received a Letter of Award (LoA) to set up 966 MW RTC (round-the-clock) hybrid renewable power for Tata Steel. The project has a hybrid renewable capacity of 379 MW solar and 587 MW wind power. Tata Steel will invest 26 percent equity in the said project. The project will be commissioned by June 1, 2025.
NHPC: Subsidiary NHDC has received a pump hydro storage site in Khandwa, Madhya Pradesh with an estimated storage capacity of 525 MW X 6 hours, from the New and Renewable Energy Department, Government of Madhya Pradesh.
GAIL India: The state-owned natural gas company has released payment to all stakeholders of JBF Petrochemicals as per an NCLT order. The Corporate Insolvency Resolution Process (CIRP) will be completed in 15 months. GAIL has already infused a total resolution plan amount of Rs 2,101 crore, thus acquiring 100 percent stake in JBF Petrochemicals.
Aether Industries: The speciality chemical manufacturer has inked a license agreement with Saudi Aramco Technologies Company for the commercialisation of the sustainable Converge polyols technology. The agreement formally initiates Aether’s activities towards manufacturing and commercialization at Aether of the Converge polyols technology and product series.
Fund Flow
Foreign institutional investors (FIIs) bought shares worth Rs 212.40 crore, whereas domestic institutional investors (DIIs) sold shares worth Rs 405.01 crore on June 8, provisional data from the National Stock Exchange shows.
Stocks under F&O ban on NSE
The National Stock Exchange has retained Indiabulls Housing Financeand Manappuram Finance to its F&O ban list for June 9. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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