Taking Stock: Telecom stocks shine in volatile trade; Nifty fails to hold 11,900

Indian stock markets saw a late sell-off on November 15, which shaved off nearly 300 points from the Sensex's intraday high of 40,650. The Nifty failed to hold on to 11,900 levels.

Sensex closed higher by 70.21 points, 0.17 percent, at 40,356 while Nifty settled at 11,895, up 23 points, 0.20 percent

For the week, Sensex rose 0.08 percent while Nifty fell 0.1 percent.

The telecom counter buzzed with activity, followed by banks and PSU stocks while FMCG, IT and oil & gas stocks saw some profit-taking.

Experts feel that progress on the US-China trade deal did improve sentiment but muted macros weighed on the sentiment which triggered profit-taking as Nifty50 inched closer towards 12,000 levels.

The index closed above its crucial 5-days EMA which is a positive sign, but for the week closed flat with a negative bias.

"Signals on further progress on US-China trade deal improved sentiment across global markets but weakening macros and a muted end to Q2 results induced investors to book profits at higher levels. Government plans to set a minimum price for mobile calls and data to revive the telecom sector, boosted telecom stocks. Further, PSU banks gained some ground on account of likelihood reduction in NPAs post the favourable verdict from the Supreme Court. Given declining macros, the market expects concrete steps from government and RBI to push growth going ahead," said Vinod Nair, Head of Research, Geojit Financial Services Ltd.

Top Nifty gainers: Bharti Airtel and Bharti Infratel rose 8% each

Top Nifty losers: IOC fell 3.7 percent, followed by Hero MotoCorp which fell 1.87 percent, and BPCL fell 1.57 percent, respectively.

Sectorally, the S&P BSE Telecom index rose 8.5 percent, followed by Bankex which was up 0.9 percent, and Public Sector index gained 0.67 percent.

Selling was seen in the Power index, which fell 0.76 percent, followed by FMCG index, which was down 0.6 percent, and IT index (0.4 percent).

Mixed performance was seen in broader markets – the S&P BSE Smallcap index was down 0.13 percent, and the Midcap index was up 0.63 percent.

Volume spike of 100-300 percent was seen in stocks like SBI, Idea, Chola Finance, Glenmark, Bharti Airtel, and Cipla.

Long Buildup – Chola Finance, Bharti Airtel, SBI

Short Buildup – InterGlobe Aviation, IOC, CESC

PSU Banks rally: Shares of PSU banks rallied on November 15 after the Supreme Court delivered its verdict in the Essar Steel case. SC has set aside the NCLAT judgement, saying the ultimate discretion on distribution of funds is with Committee of Creditors (CoC) which is completely favourable to lenders.

SBI was up 5.19 percent, followed by PNB which gained 2.74 percent, and the Central Bank of India rose 9.59 percent.

Fortis Healthcare: Fortis Healthcare share price ended over 8 percent lower on November 15 after SC holds Singh brothers, company guilty of contempt. The Supreme Court quashed the proceedings for eviction of EHIRCL from its premises in Delhi’s Okhla, the company told the exchanges.

Telecom stocks rally: Telecom stocks saw the traction after sources had said that the panel of committee of secretaries (CoS) was mulling floor price on data and voice tariffs and had sought recommendations from Department of Telecom (DoT) on setting a minimum charge for all tariffs for telecom players while assessing the impact it would have on telecom operators, CNBC-TV18 reported.

Sterling & Wilson Solar: Sterling & Wilson Solar ended 20 percent in the red and were locked in 20 percent lower circuit on November 15 after promoters revised their loan repayment schedule announced during the IPO in August.

Nifty50 registered a Bearish reversal formation called Gravestone Doji in which open, close and low of a candle are equal or similar

Friday’s intraday sell-off with long upper shadow, from the highs of 11973, is clearly suggesting lack of conviction on the part of bulls at higher levels.

If Nifty slips below 11891 levels on Monday then it should head towards 11802, 11700 levels

Traders are advised to remain neutral on the long side whereas intraday traders can create fresh shorts below 11891 and look for a target of 11800, suggest experts.

Three levels: 11879, 11973, 12034

Max Call OI: 12000, 11800

Max Put OI: 11600, 11500