The market recouped significant losses and closed off the day's low, continuing the downtrend for a third consecutive session on January 12, dented by selling in oil & gas, and select banks, and FMCG stocks.
The BSE Sensex declined 147 points to 59,958, while the Nifty50 fell 38 points to 17,858 and formed a bearish candle on the daily charts with a long lower shadow indicating support-based buying.
"A small negative candle was formed on the daily chart with a lower shadow. We observe two consecutive candles with lower shadows in the last couple of sessions. On Thursday, the market moved below the crucial lower support of 17,800 levels but was managed to pull back from the lows," Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.
Shetti feels the upside recovery in the market from the lows could be a cheering factor for bulls to make a comeback. But Nifty needs to sustain the pullback rally to call this action as a bullish reversal pattern.
A sustainable move above 17,950-18,000 levels could be crucial to watch on the higher side, whereas further weakness below 17,800-17,750 is likely to open a possibility of a sharp downside breakout in the market, the expert said.
On the broader markets front, the Nifty Midcap 100 index was down a third of a percent, and the Smallcap 100 index closed flat.
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 of the current month.
Key support and resistance levels on the Nifty
Per the pivot charts, we have the key support level for the Nifty at 17,785, followed by 17,741, and 17,671. If the index moves up, the key resistance levels to watch out for are 17,925, followed by 17,969 and 18,039.
The Nifty Bank index was also under pressure, falling 150 points to 42,082 and forming a bearish candle on the daily charts with a long lower shadow indicating support-based buying.
The important pivot level, which will act as crucial support for the index, is placed at 41,827, followed by 41,685, and 41,456. On the upside, key resistance levels are placed at 42,286, followed by 42,427, and 42,657.
On the weekly basis, we have seen the maximum Call open interest (OI) at 17,900 strike, with 93.92 lakh contracts, which can act as a crucial resistance level in the coming sessions of the January series.
This is followed by 18,000 strike, comprising 78.98 lakh contracts, and 18,300 strike, where we have more than 57.38 contracts.
Call writing was seen at 17,900 strike, which added 19.37 lakh contracts, followed by 17,800 strike, which added 8.57 lakh contracts, and 18,900 strike, which added 3.88 lakh contracts.
Call unwinding was seen at 18,100 strike, which shed 65.7 lakh contracts, followed by 18,000 strike, which shed 65.6 lakh contracts, and 18,200 strike, which shed 47.12 lakh contracts.
On the weekly basis, the maximum Put OI was seen at 17,800 strike, with 73.48 lakh contracts, which can act as crucial support for the Nifty50 in the coming sessions of the January series.
This is followed by a 17,500 strike, comprising 56.6 lakh contracts, and a 17,700 strike, where we have 45.39 lakh contracts.
Put writing was seen at 17,100 strike, which added 1.05 lakh contracts, followed by 16,900 strike, which added 80,700 contracts.
Put unwinding was seen at 17,900 strike, which shed 42.75 lakh contracts, followed by 18,000 strike, which shed 32.18 lakh contracts, and 17,600 strike, which shed 21.22 lakh contracts.
Stocks with a high delivery percentage
A high delivery percentage suggests that investors are showing interest in these stocks. We have seen the highest delivery in Power Grid Corporation of India, Abbott India, Kotak Mahindra Bank, Atul, and HDFC, among others.
An increase in OI, along with an increase in price, mostly indicates a build-up of long positions. Based on the OI percentage, a long build-up was seen in 21 stocks on Thursday, including Navin Fluorine International, PVR, Cummins India, JK Cement, and HCL Technologies.
A decline in OI, along with a decrease in price, mostly indicates long unwinding. Based on the OI percentage, 45 stocks saw long unwinding on Thursday, including NALCO, NMDC, InterGlobe Aviation, Mphasis, and Aditya Birla Capital.
An increase in OI, along with a decrease in price, mostly indicates a build-up of short positions. Based on the OI percentage, we have seen a short build-up in 79 stocks on Thursday, including Coforge, Divi's Laboratories, Reliance Industries, Tata Communications, and Aditya Birla Fashion & Retail.
47 stocks witnessed short-covering
A decrease in OI, along with an increase in price, mostly indicates a short-covering. Based on the OI percentage, a total of 47 stocks were in the short-covering list on Thursday, including Persistent Systems, Sun TV Network, Samvardhana Motherson International, Mahindra & Mahindra, and Info Edge.
One 97 Communications: Morgan Stanley Asia (Singapore) Pte - ODI acquired 54.95 lakh shares in the Paytm operator and Ghisallo Master Fund LP bought 49.8 lakh shares in the company at an average price of Rs 534.8 per share. However, Alibaba.com Singapore E-Commerce Private Limited sold 1.92 crore shares in Paytm at an average price of Rs 536.95 per share and the deal was worth Rs 1,030.94 crore.
Sah Polymers: Saint Capital Fund sold 1.78 lakh shares in the bulk packaging solutions provider and Vikasa India EIF I Fund-Incube Global Opportunities offloaded 3.43 lakh shares at an average price of Rs 89.25 per share. Rajasthan Global Securities sold 3.68 lakh shares at an average price of Rs 85 per share. Maven India Fund offloaded 1.78 lakh shares in the company at an average price of Rs 89.12 per shares, and Elara India Opportunities Fund sold 9.1 lakh shares at an average price of Rs 86.14 per share. However, Stock Vertex Ventures, L7 Hitech, BNK Securities, Ashwin Stocks and Investment, and Arya Fin-Trade Services (India) acquired 11.84 lakh shares of Sah Polymers.
(For more bulk deals, click here)
Results on January 13 and January 14
Wipro, L&T Finance Holdings, Aditya Birla Money, Just Dial, The Anup Engineering, Choice International, Ganesh Housing Corporation, and Rajnish Wellness will be in focus ahead of quarterly earnings on January 13.
HDFC Bank, Avenue Supermarts, Infomedia Press, Nouveau Global Ventures, and ZF Steering Gear will be in focus ahead of quarterly earnings on January 14.
Stocks in the news
Infosys: The IT services company clocked 9.4 percent QoQ growth in profit at Rs 6,586 crore and revenue grew by 4.9 percent to Rs 38,318 crore, beating analysts' expectations. Revenue in dollar terms increased 2.3 percent QoQ to $4,659 million and constant currency revenue growth at 2.4 percent QoQ for Q3FY23. The company raised its FY23 revenue growth guidance, in constant currency terms, to 16-16.5 percent, from 15-16 percent earlier, and EBIT margin guidance remains unchanged at 21-22 percent.
HCL Technologies: The IT company reported better than expected earnings for Q3FY23. It clocked a 17.4 percent QoQ growth in Q3FY23 profit at Rs 4,096 crore and revenue increased by 8.2 percent to Rs 26,700 crore. Revenue in dollar terms grew by 5.3 percent sequentially to $3,244 million with constant currency revenue growth at 5 percent for the quarter. Total contract value was down 1.6 percent sequentially to $2,347 million, while the IT attrition rate dropped to 21.7 percent from 23.80 percent during the same period. The company revised full year constant currency revenue growth forecast to 13.5-14 percent from 13.5-14.5 percent earlier and also lowered EBIT margin guidance to 18-18.5 percent from 18-19 percent earlier.
V-Guard Industries: The company has completed acquisition of 100 percent shareholding in Sunflame Enterprises for Rs 680.33 crore. Out of the total consideration, Rs 25 crore will be paid by the company to the selling shareholders after two years from the date of closure.
Shriram Finance: Private equity player Apax Partners arm Dynasty Acquisition is likely to sell its entire stake - (up to 1.73 crore shares or a 4.63 percent stake) in Shriram Finance via a block deal on January 13, reports CNBC Awaaz quoting sources. As per the report, Apax will offer up to a 6 percent discount on deal. The deal size is Rs 2,250 crore including the green shoe option.
L&T Technology Services: The company has agreed to acquire the smart world & communication (SWC) Business of L&T. This will enable company to combine synergies and take offerings in next-gen communications, sustainable spaces and cybersecurity to the global market. Smart World & Communication was founded in 2016 to cater to the demands in smart cities, address opportunities and provide smart solutions in the areas of end-to-end communications, city surveillance and intelligent traffic management system for the Government as well as enterprises.
Rail Vikas Nigam: The company has bagged project worth Rs 38.97 crore. It has received letter of award from Southern Railway for the said project.
Anand Rathi Wealth: The company reported a 35 percent year-on-year growth in consolidated profit at Rs 43.22 crore for the quarter ended December FY23, backed by operating performance and topline. Consolidated revenue from operations grew by 30.6 percent YoY to Rs 138 crore in Q3FY23.
GTPL Hathway: The digital cable TV service provider has reported a 31 percent year-on-year decline in profit at Rs 37.6 crore for the quarter ended December FY23, impacted by weak operating performance. Revenue from operations grew by 15 percent YoY to Rs 705 crore with digital cable TV business rising 3 percent and broadband segment growing 18 percent, but EBITDA fell 11 percent to Rs 131.4 crore and margin contracted to 18.6 percent from 24.1 percent on year-on-year basis.
Foreign institutional investors (FII) sold shares worth Rs 1,662.63 crore, continuing selling for the 15th session in a row, but domestic institutional investors (DII) have managed to offset the FII outflow by net buying shares worth Rs 2,127.65 crore on January 12, as per provisional data available on the NSE.
Stocks under F&O ban on NSE
Indiabulls Housing Finance and GNFC will remain under the NSE F&O ban list for January 13. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95 percent of the market-wide position limit.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Disclaimer: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.