The market continued to see southward journey for three days in a row on May 18 and closed at a near-two-week low on the Nifty despite positive trend in global counterparts, but Bank Nifty performed better than benchmarks.
The BSE Sensex fell 129 points to 61,432, while the Nifty50 dropped 52 points to 18,130 and formed bearish candlestick pattern on the daily scale with making lower highs, lower lows for the third straight session.
"Future open interest data indicated build-up of short positions in Nifty. Unless Nifty gives a higher close on the daily chart, the correction is likely to continue," said Ashwin Ramani, Derivatives & Technical Analyst at SAMCO Securities.
For Nifty, he feels 18,050 is likely to act as an immediate support for the index, while a break of this level can even take Nifty to 17,800 levels, where next visible support is placed. "18,400 is likely to act as resistance for Nifty as we head into the last week of May expiry," he said.
The India VIX, which is the fear indicator, has risen nearly 12 percent since the start of May expiry series, giving serious discomfort to the bulls.
The broader markets were also under pressure with the Nifty Midcap 100 and Smallcap 100 indices falling around half a percent each.
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 the current month.
Key support and resistance levels on Nifty
The pivot charts indicate that the Nifty may get support at 18,104, followed by 18,058 and 17,985. If the index advances, 18,251 would be the initial key resistance level to watch out for, followed by 18,296 and 18,370.
The Bank Nifty outperformed frontline index as well as broader markets, rising 54 points to 43,752 and formed bearish candlestick pattern on the daily charts, but making higher top, higher bottom formation.
"The support zone in Bank Nifty is still intact, though between 43,500 and 42,800. This should still give us a move towards the all-time high levels," said Rahul Ghose, Founder & CEO at Hedged.
As per the pivot point calculator, the Bank Nifty may take support at 43,680, followed by 43,584 and 43,430. Key resistance levels are expected to be 43,990 along with 44,086 and 44,241.
As per the monthly options front, the maximum Call open interest (OI) was at 18,400 strike, with 88.84 lakh contracts, which is expected to be a crucial resistance level for the Nifty in the coming sessions.
This was followed by 18,400 strike comprising 88.63 lakh contracts, and 18,200 strike with more than 84.3 lakh contracts.
Call writing was at 19,100 strike, which added 9.54 lakh contracts.
Meaningful Call unwinding was at 18,400 strike, which shed 63.18 lakh contracts, followed by 18,300 strike, which shed 46.86 lakh contracts, and 18,800 strike, which shed 27.26 lakh contracts.
The maximum Put open interest was at 18,100 strike with 1.08 crore contracts, which is expected to act as an important support level in the coming sessions.
This was followed by the 18,000 strike, comprising 58.75 lakh contracts, and the 17,800 strike where we have 37.86 lakh contracts.
Put writing was seen at 18,100 strike, which added 34.88 lakh contracts, followed by 17,200 strike, which added 8.19 lakh contracts.
We have seen Put unwinding at 18,200 strike, which shed 40.35 lakh contracts, followed by 18,000 strike, which shed 27.14 lakh contracts, and 17,900 strike, which shed 21.39 lakh contracts.
Stocks with a high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. The highest delivery was seen in Container Corporation of India, Pidilite Industries, Eicher Motors, Dabur India, and Alkem Laboratories among others.
An increase in open interest (OI) and price typically indicates a build-up of long positions. Based on the OI percentage, 22 stocks, including Can Fin Homes, SBI Card, Cholamandalam Investment and Finance, United Spirits, and HDFC saw long build-ups.
A decline in OI and price generally indicates a long unwinding. Based on the OI percentage, 59 stocks including GNFC, LIC Housing Finance, Metropolis Healthcare, Escorts, and Indraprastha Gas saw a long unwinding.
89 stocks see a short build-up
An increase in OI along with a price decrease indicates a build-up of short positions. Based on the OI percentage, 89 stocks, including Ramco Cements, State Bank of India, GAIL, ITC, and Chambal Fertilizers saw a short build-up.
A decrease in OI along with a price increase is an indication of short-covering. Based on the OI percentage, 20 stocks were on the short-covering list. These included PVRInox, Whirlpool, Balrampur Chini Mills, Dixon Technologies, and Bandhan Bank.
BLS International Services: Promoter Diwakar Aggarwal has sold 1.12 crore equity shares, or 2.72 percent stake, in the visa consultancy services provider via open market transactions at an average price of Rs 175.24 per share, amounting to Rs 196.3 crore. Diwakar Aggarwal among promoters held 8.49 percent stake or 3.48 crore shares in the company as of March 2023.
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Stocks in the news
Nexus Select Trust: The leading real estate investment trust is going to make a debut on the bourses on May 19. The issue price has been fixed at Rs 100 per unit.
Wipro: The technology services and consulting company announced a five-year business partnership with ServiceNow to drive business transformation, overcome business challenges, and deliver greater value. The agreement is expected to help accelerate Wipro’s goal of building a $1 billion business with ServiceNow by the end of 2026.
InterGlobe Aviation: The operator of low-cost carrier IndiGo recorded profit at Rs 919.2 crore for quarter ended March FY23, against loss of Rs 1,681.8 crore in same period last year, driven by healthy operating numbers and topline growth. Revenue from operations grew by 76.5 percent to Rs 14,160.6 crore compared to same period last year.
Rail Vikas Nigam: The railway company has formed one joint venture - Indore MMLP - with National Highways Logistics Management, and Madhya Pradesh Industrial Development Corporation. The JV will develop Multi Modal Logistics Parks across PAN India under the Bharatmala Pariyojana.
Pfizer: The company has decided to initiate a voluntary recall of three products manufactured by Astral SteriTech. These products are marketed/distributed by Pfizer. Astral SteriTech informed Pfizer that it has observed an out-of-specification during a routine environmental monitoring of its manufacturing block. Astral manufactures three products for Pfizer, namely, Magnex, Magnamycin and Zosyn.
Bata India: The footwear company has reported a 4.4 percent year-on-year growth in standalone profit at Rs 65.5 crore in March FY23 quarter, impacted by weak operating margin performance. Revenue from operations grew by 17 percent to Rs 778.6 crore compared to same period last year.
United Spirits: The beverage company recorded a 7.4 percent year-on-year growth in profit at Rs 204 crore for quarter ended March FY23 despite weak operating margin performance. Revenue fell 0.3 percent to Rs 2,494 crore compared to year-ago period.
Fund Flow
Foreign institutional investors (FIIs) bought shares worth Rs 970.18 crore, whereas domestic institutional investors (DIIs) sold shares worth Rs 849.96 crore on May 18, provisional data from the National Stock Exchange showed.
Stocks under F&O ban on NSE
The National Stock Exchange has added L&T Finance Holdings, and retained Aditya Birla Fashion & Retail, Balrampur Chini Mills, Delta Corp, GNFC, LIC Housing Finance, Manappuram Finance, and Punjab National Bank to its F&O ban list for May 19. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.
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