The market is likely to stay in the range of 19,250-19,600 in coming sessions, as the healthy attempt of a rally on August 24 failed due to a strong bear attack, experts said. Only if the index successfully manages to close above the 19,500 mark in coming sessions that a new leg of rally is possible.
On August 24, it was a great start for the market and looked like a strong breakout with the Nifty reaching closer to the 19,600 mark on the weekly F&O expiry day. But the entire rally fizzled out in the afternoon as bears took control over Dalal Street. The index lost nearly 200 points from the day's high and closed lower by 57 points at 19,387, forming a long bearish candlestick pattern which resembles a Bearish Engulfing kind of pattern formation on the daily scale, indicating the bear may be in power but requires same kind of action in the following session for confirmation of downtrend.
However, the Nifty continued to make higher highs formation for the fourth straight session by getting support at the previous day's low.
"The Nifty faced stiff resistance around the previous high of 19,600. It seems that bears are in no mood to let go off bulls so easily. Maximum Call and Put open interest is currently placed at 19,400 levels. This indicates that the Nifty is back in no man’s land," Apurva Sheth, head of market perspectives & research at SAMCO Securities said.
Hence, he feels that the index is likely to trade in a range of 19,300 to 19,600 till there is a decisive breakout.
The BSE Sensex was down 181 points to 65,252, while the Nifty Midcap 100 index gained 0.24 percent, but the Smallcap 100 index fell 0.35 percent.
We have collated 15 data points to help you spot profitable trades:
Note: The open interest (OI) and volume data of stocks are the aggregates of three-month data and not just the current month.
Key support and resistance levels on Nifty
The pivot point calculator indicates that the Nifty may get support at 19,364, followed by 19,314 and 19,231. In case of an upside, 19,529 can be the key resistance, followed by 19,580 and 19,662.
On August 24, the Bank Nifty also saw selling pressure at higher levels and shed more than 400 points from the day's high to close with just 17 points gains at 44,496. The index has formed a bearish candlestick pattern with a long upper shadow on the daily charts.
"The pullback rally has fizzled out around the 44,900 – 45,000 zone which coincided with the 50 percent Fibonacci retracement level and the previous swing high," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
He believes that the daily and hourly momentum indicators are providing divergent signals and hence a consolidation is likely in the short term. The range of consolidation is likely to be 44,000–45,000, he said.
The pivot point calculator indicates that the Bank Nifty is likely to take support at 44,430, followed by 44,308 and 44,111. On the upside, the initial resistance is at 44,824, followed by 44,946 and 45,143.
As per the options data, the maximum weekly Call open interest (OI) was at 19,400 strike with 1.6 crore contracts, which can act as a key resistance for the Nifty. It was followed by 19,500 strike, which had 96.8 lakh contracts, while 19,600 strike had 73.03 lakh contracts.
The maximum Call writing was seen at 19,400 strike, which added 72.46 lakh contracts, followed by 19,900 and 20,000 strikes, which added 8.86 lakh and 8.08 lakh contracts, respectively.
The maximum Call unwinding was at 19,600 strike, which shed 52.25 lakh contracts, followed by 19,500 strike and 19,700 strike, which shed 41.55 lakh contracts, and 27.55 lakh contracts, respectively.
The maximum Put open interest was seen at 19,300 strike, with 90.25 lakh contracts. This can be an important support for Nifty in the coming sessions.
It was followed by 19,400 strike, comprising 83.87 lakh contracts, and 19,200 strike with 45.01 lakh contracts.
The maximum Put writing was seen only at 19,700 strike, which added 16,350 contracts, within the strike range of 18,300-20,500.
Meaningful Put unwinding was at 19,200 strike, which shed 48.59 lakh contracts, followed by 19,400 and 19,300 strikes, which shed 42.13 lakh and 42.07 lakh contracts, respectively.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. Dr Reddy's Laboratories, Max Financial Services, Infosys, Coforge, and Bosch were among the stocks that saw the highest delivery.
Coforge, GMR Airports Infrastructure, Coromandel International, Persistent Systems, and Oracle Financial were among the 38 stocks to see a long build-up. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, 39 stocks, including BHEL, Dr Reddy's Laboratories, Polycab India, Dixon Technologies, and Astral saw long unwinding. A decline in OI and price indicates long unwinding.
62 stocks see a short build-up
A short build-up was seen in 62 stocks, including RBL Bank, Larsen & Toubro, Alkem Laboratories, IDFC First Bank, and LTIMindtree. An increase in OI along with a fall in price points to a build-up of short positions.
Based on the OI percentage, 47 stocks were on the short-covering list. These included Sun TV Network, Escorts Kubota, Torrent Pharmaceuticals, Chambal Fertilisers, and Gujarat Narmada Valley Fertilizers and Chemicals (GNFC). A decrease in OI along with a price increase is an indication of short-covering.
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Investors meeting on August 25
Stocks in the news
One 97 Communications: Promoter Antfin is likely to sell 3.6 percent stake or 2.3 crore shares of fintech company Paytm via a block deal on August 25, reported Bloomberg. The floor price for the deal is likely to be at a discount of Rs 880.10 per share, a 2.7 percent discount from the August 24 closing price.
Astra Microwave Products: The manufacturer of sub-systems for radio frequency and microwave systems has bagged orders worth Rs 158 crore for the supply of satellite sub-systems, airborne radar and sub-systems of radar and EW projects, from DRDO, ISRO and DPSUs.
Bharat Electronics: To enhance the efficiency of the Indian Air Force, the Defence Acquisition Council has granted Acceptance of Necessity for procurement and installation of electronic warfare (EW) suite on Mi-17 V5 helicopters under buy (Indian-IDDM) category which will enhance better survivability of helicopters. The EW Suite will be procured from Bharat Electronics (BEL).
Vedanta: The mining company has received an arbitration award upholding the company's contention in the Rajasthan block case. The contention of the company is that the additional profit petroleum is not payable as per terms of the production sharing contract for the Rajasthan block. The profit petroleum is on account of Director General of Hydrocarbon (DGH) audit exceptions in relation to the allocation of common development costs across Development Areas and certain other matters.
Bharti Airtel, Reliance Industries: Telecom operator Bharti Airtel has net added 14.09 lakh users in June against 13.28 lakh addition in May, and Reliance Jio, a part of Reliance Industries' Jio Platforms, has net added 22.7 lakh users in June against addition of 30.38 lakh users in previous month, whereas Vodafone Idea lost 12.85 lakh users in June against loss of 28.15 lakh users in May.
Shoppers Stop: Venugopal G Nair has resigned as Managing Director & CEO of the department store chain with effect from August 31, 2023. The board members have appointed Kavindra Mishra as an Additional Director of the company with effect from September 1. Kavindra has also been promoted from his position as Chief Commercial Officer and CEO of Homestop to Executive Director & Chief Executive Officer of Shoppers Stop for three years.
Fund Flow
Foreign institutional investors (FII) bought shares worth Rs 1,524.87 crore, while domestic institutional investors (DII) purchased Rs 5,796.61 crore worth of stocks on August 24, provisional data from the National Stock Exchange (NSE) showed.
Stocks under F&O ban on NSE
The NSE has added GMR Airports Infrastructure, and RBL Bank to its F&O ban list for August 25, while retaining BHEL, Delta Corp, Gujarat Narmada Valley Fertilizers and Chemicals (GNFC), Hindustan Copper, Indiabulls Housing Finance, India Cements, Manappuram Finance, Metropolis Healthcare, and Punjab National Bank in the list. However, Escorts Kubota, and Sun TV Network were removed from the said list.
Securities banned under the F&O segment include companies where derivative contracts have crossed 95 percent of the market-wide position limit.
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