The market rebounded smartly after couple of days of correction and climbed back above the 19,500 mark on October 5, with formation of bullish candlestick pattern on the Nifty on the daily charts. If the index sustains this uptrend in coming session then it may face hurdle at 19,600-19,700 levels, whereas on the lower side 19,400-19,350 can be key support, experts said.
The positive signals from PMI data, and fall in oil prices seem to have boosted sentiment, while in terms of sectors, banking & financial services and technology stocks supported the market.
The benchmark indices had a gap up opening, with the BSE Sensex rising 406 points at 65,632, and the Nifty50 climbing 110 points to 19,546, ahead of the outcome of Monetary Policy Committee scheduled on October 6.
“The opening downside gap of Wednesday and the opening upside gap of Thursday are unfilled, which is indicating a formation of bullish ‘island reversal’ type pattern as per hourly/daily timeframe chart. This is positive indication for the short term and it opens potential upside pattern target of 19726 levels for the short term,” said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The broader negative chart pattern like lower tops and bottoms is intact as per daily timeframe chart and further upside from here could open chances of new lower top formation, he feels.
“The display of further strength in current upside bounce could possibly pull Nifty towards 19,726 levels. Any failure to sustain the highs is expected to trigger fresh weakness from the lower highs,” Nagaraj said.
On the broader markets front, the Nifty Midcap 100 index was flat and the Nifty Smallcap 100 index rose 0.6 percent amid positive breadth. The volatility cooled down considerably with the India VIX declining 5.94 percent to 10.94 levels.
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 19,502, followed by 19,481 and 19,447. On the higher side, 19,571 can be an immediate resistance, followed by 19,592 and 19,626.
On October 5, the Bank Nifty also remained strong throughout session after positive opening, and closed with 249 points gains at 44,213, forming small bodied bullish candlestick pattern with long upper shadow & minor lower shadow on the daily charts.
Overall, the index bulls displayed resilience before the RBI policy announcement by maintaining support in the 44,000-43,800 range. “Immediate resistance on the upside lies at the 44,400-44,500 zone. A breakthrough here could trigger short-covering, potentially driving the index towards the 45,000 mark, which currently has the highest open interest on the Call side,” said Kunal Shah, senior technical & derivative analyst at LKP Securities.
The RBI policy decision may influence the near-term direction of the index, he feels.
As per the pivot point calculator, the banking index is expected to take support at 44,130, followed by 44,063 and 43,954. On the upside, the initial resistance is at 44,346, then at 44,413 and at 44,521.
The weekly options data suggested that the maximum Call open interest (OI) remained at 19,600 strike with 2.02 crore contracts, which can act as a key resistance for the Nifty. It was followed by the 19,700 strike, which had 1.67 crore contracts, while 19,800 strike had 96.36 lakh contracts.
Meaningful Call writing was seen at 19,600 strike, which added 65.75 lakh contracts followed by 19,700 and 20,500 strikes, which added 61.46 lakh and 16.6 lakh contracts.
The maximum Call unwinding was at 19,500 strike, which shed 65.94 lakh contracts followed by 19,400 strike and 20,200 strike, which shed 48.22 lakh contracts and 20.57 lakh contracts.
On the Put side, the maximum open interest was at 19,500 strike with 1.77 crore contracts. This can be an important support for the Nifty in the coming sessions.
It was followed by 19,400 strike, comprising 1.09 crore contracts and 19,300 strike with 91.47 lakh contracts.
The meaningful Put writing was at 19,500 strike, which added 1.4 crore contracts, followed by 19,600 strike and 19,000 strike, which added 48.01 lakh and 23.2 lakh contracts.
Put unwinding was at 18,800 strike, which shed 29.92 lakh contracts, followed by 19,200 strike and 19,300 strike, which shed 24.93 lakh and 12.48 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. Bharti Airtel, Torrent Pharma, HDFC Bank, Shriram Finance, and Britannia Industries saw the highest delivery among the F&O stocks.
A long build-up was seen in 49 stocks namely, Coromandel International, Max Financial Services, Sun TV Network, Larurus Labs, and Balkrishna Industries. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, a total of 30 stocks, including Mahanagar Gas, Federal Bank, Manappuram Finance, Sun Pharma, and Nestle India saw a long unwinding. A decline in OI and price indicates long unwinding.
54 stocks see a short build-up
A short build-up was seen in 54 stocks, including Oberoi Realty, Dalmia Bharat, Marico, Dixon Technologies, and Oracle Financial. An increase in OI along with a fall in price points to a build-up of short positions.
Based on the OI percentage, 53 stocks were on the short-covering list. These included MCX India, Hindustan Unilever, UltraTech Cement, Eicher Motors, and Bajaj Finance. A decrease in OI along with a price increase is an indication of short-covering.
For more bulk deals, click here
Investors meeting on October 6
Aegis Logistics: Company’s officials will be meeting analysts and institutional investors.
Stocks in the news
Valiant Laboratories: The pharma company is set to debut on the bourses on October 6. The issue price is Rs 140 per share. The date of allotment is October 4.
Tata Motors: Wholesale volumes were at 96,817 cars (excluding the Chery Jaguar Land Rover China JV), up 29 percent from the year-ago quarter, and 4 percent higher from the April-June period, notwithstanding the annual two-week summer plant shutdown. Wholesale volumes for the first half of the financial year were 190,070, up 29 percent from the year-ago period.
Sun Pharma: The company has decided to acquire a 37.76 percent stake in Ezerx Health Tech Private Limited which is engaged in production, marketing and distribution of non-invasive diagnostic and ancillary medical device. The acquisition will cost about Rs 29 crore.
KPI Green: The company has received new orders aggregating to 12.10 MW for executing solar power projects, out of which 3.10 MW capacity undertaken by KPI Green Energy Limited and 9 MW capacity by M/s. Sun Drops Energia Private Limited, a wholly owned subsidiary of the company under ‘Captive Power Producer (CPP)’ segment of the company. It did not specify the monetary value of the order.
BHEL: Bharat Heavy Electricals said it has received two awards in arbitration proceedings against Jaiprakash Power Ventures Limited in two separate cases.
Som Distilleries: The company said its board has authorised the opening of its fund raise and approved the floor price of Rs 349.24 for the issue.
Lupin: The pharma major has received tentative approval from the United States Food and Drug Administration (US FDA) for Tolvaptan Tablets, 15 mg, 30 mg, 45 mg, 60 mg, and 90 mg to market a generic equivalent of Jynarque Tablets, 15 mg, 30 mg, 45 mg, 60 mg, and 90 mg, of Otsuka Pharmaceutical Co., Ltd. This product will be manufactured at Lupin’s Nagpur facility in India. Tolvaptan Tablets (RLD Jynarque) had estimated annual sales of $287 million in the US.
Fund Flow (Rs Crore)
Foreign institutional investors (FII) offloaded shares worth Rs 1,864.20 crore, while domestic institutional investors (DII) purchased Rs 521.41 crore worth of stocks on October 5, provisional data from the National Stock Exchange (NSE) showed.
Stocks under F&O ban on NSE
The NSE has added Punjab National Bank to its F&O ban list for October 6, while retaining Indiabulls Housing Finance, Delta Corp, and Manappuram 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.
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.
