Shabbir Kayyumi of Narnolia Financial Advisors said the strong bearish bias will be confirmed on a decisive close below 11,570 levels.
The market fell for the second consecutive session on April 4 as a lower growth forecast by RBI dented trader sentiment. Banks, technology and metal stocks pulled benchmark indices lower.
Profit booking could also be a reason after the Monetary Policy Committee cut repo rate by 25 basis points (bps), on expected lines.
The BSE Sensex dropped 192.40 points to 38,684.72 while the Nifty 50 slipped 46 points to 11,598, forming a bearish candle resembling a 'Bearish Belt Hold' kind of formation on daily charts.
"A small negative candle was formed, which has placed it at the support of 11,560 (previous swing high of mid of March, as per the concept of change in polarity)," Nagaraj Shetti – Senior Technical & Derivative Analyst, HDFC Securities told Moneycontrol.
Technically, he said this pattern could indicate a negative trend, but the lack of strength in the downside momentum (absence of sharp weakness today) could give the bulls a chance to make a comeback from the lows.
Hence, a decisive move below 11,550 levels could signal more weakness for near term, he added.
Shabbir Kayyumi, Head of Technical Research, Narnolia Financial Advisors said although Nifty is trading with lower high and lower low formation for the continuous second day, the strong bearish bias will be confirmed on a decisive close below 11,570 levels. "Next key support is 11,540 where the line of parity is placed."
The broader markets also traded in line with frontliners as the Nifty Midcap index fell 0.2 percent and Smallcap index declined 0.47 percent. About three shares declined for every two shares rising on the NSE.
We have collated top 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
The Nifty closed at 11,598 on April 4. According to the Pivot charts, the key support level is placed at 11,550.63, followed by 11,503.27. If the index starts moving upward, key resistance levels to watch out are 11,653.93 and 11,709.87.
The Nifty Bank index closed at 29,904.90, down 188.40 points on April 4. The important Pivot level, which will act as crucial support for the index, is placed at 29,727.97, followed by 29,551.04. On the upside, key resistance levels are placed at 30,163.77, followed by 30,422.63.
Call options data
Maximum Call open interest (OI) of 24.48 lakh contracts was seen at the 12,000 strike price. This will act as a crucial resistance level for the April series.
This was followed by 11,800 strike price, which now holds 19.53 lakh contracts in open interest, and 11,900, which has accumulated 14.47 lakh contracts in open interest.
Significant Call writing was seen at the 11,900 strike price, which added 3.04 lakh contracts, followed by 11,800 strike that added 2.99 lakh contracts and 11,700 strike that added 2.02 lakh contracts.
Call unwinding was seen at the strike price of 12,100 that shed 1.94 lakh contracts.
Put options data
Maximum Put open interest of 21.39 lakh contracts was seen at 11,500 strike price. This will act as a crucial support level for April series.
This was followed by 11,200 strike price, which now holds 16.45 lakh contracts in open interest, and 11,300 strike price, which has now accumulated 14.08 lakh contracts in open interest.
Put writing was seen at the strike price of 11,600, which added 3 lakh contracts, followed by 11,700 strike that added 1.69 lakh contracts and 11,400 strike that added 1.42 lakh contracts.
Put unwinding was seen at the strike price of 11,800, which shed 0.71 lakh contracts, followed by 12,000 strike which shed 0.37 lakh contracts and 11,900 strike that shed 0.13 lakh contracts.
FII & DII data
Foreign Institutional Investors (FIIs) sold shares worth Rs 226.19 crore while Domestic Institutional Investors (DIIs) purchased Rs 1,206.16 crore worth of shares in the Indian equity market on April 4, as per provisional data available on the NSE.Fund Flow Picture
Stocks with a high delivery percentage
High delivery percentage suggests investors are accepting the delivery of the stock, which means that investors are bullish on it.
42 Stocks saw a long buildup
51 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
62 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.
43 stocks saw long unwinding
Bulk Deals on April 4
(For more bulk deals, Click Here)
Analyst or Board Meet/Briefings
Apcotex Industries: Board meeting is scheduled on April 25 to consider FY19 results and recommend dividend, if any, and the proposal of sub-division of equity shares of the company.
Persistent Systems: Board meeting is scheduled on April 27 to consider FY19 results and recommend dividend, if any.
GTPL Hathway: Board meeting is scheduled on April 12 to consider FY19 results and recommend dividend, if any.
Kalpataru Power Transmission: Company's officials will meet SBI Life Insurance on April 5 and attend IIFL Ahmedabad Corporate Day/Caravan on April 8.
Stocks in news
Godrej Properties: Company adds a new residential project in Navi Mumbai. Company increased its equity stake in Wonder Space Properties Private Limited from 25.1 percent to 96.03 percent by acquiring equity shares from Shubh Properties Cooperatief U.A.
Titan Company: Company sales grew in FY19 by around 21 percent, targets around 20 percent growth in FY20 despite the muted outlook for economy. Jewellery division grew 22 percent and Eyewear 23 percent in FY19.
Cipla: Company received the Establishment Inspection Report (EIR) from USFDA, indicating closure of the inspection of Goa manufacturing facility.
Bal Pharma: Company received EU-GMP approval for formulations manufacturing plant at Rudrapur, Uttarakhand.
Zensar Technologies: Company starts operations in Mexico, Latin American market.
VIP Industries: There was a fire accident at the company's warehouse in Uttar Pradesh, but fortunately no casualties. The company is taking adequate measures to ensure the re-functioning of the warehouse.
Amara Raja Batteries: Gallas will buy a 2 percent stake from Johnson Controls in Amara Raja Batteries, increasing shareholding to 28 percent.
Mahindra & Mahindra: Swaraj Tractors crossed a production milestone of 15 lakh units. It had produced over 200,000 tractors in 2018-19, second highest by an Indian tractor brand during the year.
Akme Star Housing Finance: Loan and Investment Committee approved the sanction of term loan facility of Rs 6 crore by Hinduja Housing Finance Limited.
HMT: Company and its subsidiaries recorded an increase in FY19 turnover over the previous year, and achieved the targets of production and sales set for the year 2018-19.
VST Tillers Tractors: March sales fell to 4,815 units versus 7,399 units in March 2019.
Four stocks 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 April 5, Adani Power, IDBI Bank, Jet Airways and Reliance Power are present in this list.