Investors are advised to stay on sidelines and wait for a breakout above 10930-10950 or a breakdown below 10,533 before initiating any fresh positions, suggest experts.
The Nifty registered another 100-point fall on January 3 and slipped below its crucial long-term as well as short-term moving averages. The index formed a strong bearish candle on the daily charts for the second consecutive day in a row.
Weak global cues, as well as persistent selling in metals and auto names, dragged the Nifty below its 200-day moving average as well as 50-day exponential moving average (EMA) of 10,746.
Investors are advised to stay on sidelines until a breakout above 10,930-10,950 or a breakdown below 10,533 before initiating any fresh positions suggest experts. In case there is a pullback because of trading near support levels then it is advisable to go short with a stop below 10,790.
The Nifty which opened at 10,796 managed to reclaim 10,800 levels in the first half of the session but failed to hold on to the momentum and slipped to hit an intraday low below 10,700 at 10,661. The index closed 120 points lower at 10,672.
“In line with our projections, Nifty continued its slide and registered a large bearish candle before signing off the penultimate day of the week. In this process, it decisively breached its 200-day moving average,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“For the last couple of weeks, the trajectory of the index looks to be range bound between 10,950 – 10,500 kind of levels. Hence, unless Nifty breaches 10,533 levels on a closing basis in the next two sessions bears will not be in a position to flex their muscle on the markets,” he said.
Mohammad further added if the index manages a pullback then a rally towards 10,790 can be ideal to create fresh shorts and in any case, near-term outlook will remain bearish unless Nifty trades above 10925 on a closing basis.
India VIX moved up by 2.44 percent at 16.79 levels. VIX has again spiked higher which is not giving comfort to bulls and finding selling pressure at a bounce back move.
Bank Nifty is forming lower highs from the last two trading sessions and the selling pressure is seen near to 27,200-27,350 zones.
We have collated top 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
The Nifty closed at 10,672.2 on January 3. According to Pivot charts, the key support level is placed at 10,617.6, followed by 10,563.0. If the index starts moving upwards, key resistance levels to watch out are 10,770.4 and then 10,868.6.
The Nifty Bank index closed at 26,959.8. The important Pivot level, which will act as crucial support for the index, is placed at 26,853.66, followed by 26,747.53. On the upside, key resistance levels are placed at 27,136.06, followed by 27,312.33.
Call Options Data
Maximum Call open interest (OI) of 39.11 lakh contracts was seen at the 11,000 strike price. This will act as a crucial resistance level for the January series.
This was followed by the 11,200 strike price, which now holds 32.30 lakh contracts in open interest, and 10,900, which has accumulated 27.77 lakh contracts in open interest.
Meaningful Call writing was seen at 11,000, which added 8.26 lakh contracts, followed by 10,900 strike which added 7.53 lakh contracts and 10,800 which added 6.04 lakh contracts.
There was hardly any Call unwinding seen.
Put Options data
Maximum Put open interest of 39.61 lakh contracts was seen at the 10,500 strike price. This will act as a crucial support level for the January series.
This was followed by the 10,700 strike price, which now holds 24.88 lakh contracts in open interest, and the 10,600 strike price, which has now accumulated 20.65 lakh contracts in open interest.
Significant Put writing was seen at the strike price of 10,300, which added 2.53 lakh contracts, followed by 10,400 strike which added 1.46 lakh contracts and 10,700 strike which added 1.38 lakh contracts.
Put unwinding was seen at the strike of 10,800, which shed 2.27 lakh contracts, followed by 10,500, which shed 1.11 lakh contracts, and 10,900, which shed 1.08 lakh contracts.
FII & DII data
Foreign Institutional Investors (FIIs) sold shares worth Rs 972.81 crore while Domestic Institutional Investors bought Rs 34.52 crore worth of shares in the Indian equity market on January 3, as per provisional data available on the NSE.
Stocks with high delivery percentage
High delivery percentage suggests that investors are accepting delivery of the stock, which means that investors are bullish on it.
23 stocks saw a long buildup
18 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
111 stocks saw a short build-up
An increase in open interest along with a decrease in price mostly indicates a build-up of short positions.
48 stocks saw long unwinding
Bulk Deals on January 3
BEML: Alphagrep Securities traded over 3.34 lakh shares at Rs 906.10-906.61 apiece.
Jet Airways: Tower Research Capital Markets traded 10.10 lakh shares at Rs 252.55 apiece.
Ruchi Soya: Alpha Leon Enterprises traded 18.64 lakh shares at Rs 7.77-8.12 apiece.
(For more bulk deals, click here)
Analyst or Board Meet/Briefings
Kaya: The company will participate in a concall with Unifi Capital on January 4, 2018.
New India Assurance: The company held a one-on-one meeting with Spa Capital.
Eris Lifesciences: The company will meet analysts from Champlain Investment Partners on January 4, 2018.
Stocks in news
Sun Pharma: The company completed transaction to acquire Pola Pharma
HDFC Standard Life Insurance: The firm received shareholder nod to appoint Vibha Padalkar as MD & CEO.
Torrent Power: The company won power distribution order in Thane for 20 years
NHPC: The company said that loss on Parbati-III power unit shutdown is at Rs 30.14 crore.
Rel Comm: The company filed contempt plea for non-grant of NOC by DoT for spectrum sale to Jio
Future Enterprises raises Rs 750 cr via NCDs
2 stock under ban period on NSE
Securities in ban period for the next day's trade under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.For January 4, Adani Power and Jet Airways are present in this list.