Rajesh Palviya of Axis Securities expects Nifty to trade in the range of 12,100-11,700 with mixed bias
After a rangebound trade, the market recouped its losses in the final hour and closed with marginal gains on June 7, driven by select banking and financials and IT stocks.
The BSE Sensex gained 86.18 to close at 39,615.90, while the Nifty50 rose 26.90 points to 11,870.70 and formed a small bullish candle which resembles a Doji on daily charts.
However, for the week, the Sensex lost 0.25 percent, while the Nifty50 shed 0.44 percent and formed a Spinning Top pattern on the weekly charts.
Both technical patterns indicate indecisiveness on Dalal Street, which pointed towards the consolidation in the coming week, experts said, adding the range could 11,700 to 12,000 on the Nifty.
"Normally, a formation doji after a reasonable up or down move signals an impending reversal indication. Having formed this pattern immediately after one session of decline, the predictive value of this pattern could be ruled out," Nagaraj Shetti - Technical Research Analyst, HDFC Securities told Moneycontrol.
He said the short term trend of the Nifty is weak, and a minor upside bounce is expected next week before showing further weakness. "A sustainable move below the key support of 11,760 levels could have further negative impact on the market ahead."
Rajesh Palviya, Head Technical and Derivatives Research, Axis Securities, who expects Nifty to trade in the range of 12,100-11,700 with mixed bias, said that the chart pattern suggests that if the Nifty crosses and sustains above 11,970 levels, it would witness buying which would lead the index towards 12,100-12,250 levels.
However if index breaks below 11,840 levels, it would witness selling which would take the index towards 11,770-11,630, he added.
The broader markets underperformed the frontliners, with the Nifty Midcap and Smallcap indices closing flat with negative bias.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
The Nifty closed at 11,870.65 on June 7. According to the Pivot charts, the key support level is placed at 11,794.3, followed by 11,717.9. If the index starts moving upward, key resistance levels to watch out are 11,922.3 and 11,973.9.
The Nifty Bank index closed at 31,066.55, up 209.15 points on June 7. The important Pivot level, which will act as crucial support for the index, is placed at 30,749.26, followed by 30,431.93. On the upside, key resistance levels are placed at 31,261.76, followed by 31,456.93.
Call options data
Maximum Call open interest (OI) of 27.62 lakh contracts was seen at the 12,500 strike price. This will act as a crucial resistance level for the June series.
This is followed by 12,000 strike price, which now holds 19.07 lakh contracts in open interest, and 12,200, which has accumulated 13.39 lakh contracts in open interest.
Significant Call writing was seen at 12,500 strike which added 1.52 lakh contracts, followed by 11,800 strike that added 0.69 lakh contracts and 12,100 strike which added 0.5 lakh contracts.
Call unwinding was seen at the strike price of 12,400, which shed 0.57 lakh contracts, followed by 11,900 strike which shed 0.11 lakh contracts.
Put options data
Maximum Put open interest of 27.78 lakh contracts was seen at the 11,500 strike price. This will act as a crucial support level for the June series.
This was followed by the 11,800 strike price, which now holds 17.57 lakh contracts in open interest and the 11,700 strike price, which has now accumulated 15.11 lakh contracts in open interest.
Put writing was seen at the 11,400 strike price, which added 0.84 lakh contracts, followed by the 11,600 strike which added 0.66 lakh contracts.
Put unwinding was seen at the strike price of 11,900, which shed 1.39 lakh contracts, followed by the 12,000 strike which shed 1.16 lakh contracts.
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.
30 stocks saw a long buildup
62 stocks that saw short covering
A decrease in open interest, along with an increase in price, mostly indicates short covering.
45 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.
60 stocks saw long unwinding
FII & DII data
Foreign Institutional Investors (FIIs) sold shares at a net worth of Rs 478.84 crore while Domestic Institutional Investors (DIIs) bought Rs 179.79 crore worth of shares in the Indian equity market on June 7, as per provisional data available on the NSE.
Fund Flow Picture
Stocks in news
State Bank of India: The bank will introduce repo rate-linked home loans from July 1.
HDFC Bank: Bank keeps MCLR unchanged in the range of 8.30-8.95 percent.
Bharat Forge: The company is in a joint venture with Germany's Refu Electronik, where Bharat Forge will hold a 50 percent stake.
Mindtree: L&T brings in open offer to acquire up to 5.13 crore shares in Mindtree, at Rs 980 per share. The open offer to take place from June 17 to June 28.
M&M: The company, as a part of aligning its production with its sales requirements, would be observing 'No Production Days' ranging between 5-13 days in various plants of the company and MVML during the first quarter of the financial year 2019-2020.
Kotak Mahindra Bank: The Reserve Bank of India has levied a penalty of Rs 2 crore on the bank.
Zodiac Clothing: ICRA revised the short term rating for Rs 80 crore Line of Credit to A2 from A2+.
TVS Motor: Company becomes the official sponsor for the Bangladesh National Football team.
Andhra Petrochemicals: ICRA upgraded its long-term rating from BBB to BBB+ and short term rating from A3+ to A2, which was assigned earlier to the Rs 94.18 crore Line of Credit to the company. The outlook on the long-term rating has been retained at positive. Short term rating was revised from A3+ to A2.
J&K Bank: Bank appointed RK Chhibber as interim CMD.
Xchanging Solutions: The promoter of Xchanging Technology Services India will sell 87.99 lakh shares of the company via offer for sale on June 10-11, with an option to additionally sell 87.99 lakh shares. Floor price fixed at Rs 45 per share.
CG Power and Industrial Solutions: CG launches its next generation of compact drives and advance series of products for the industrial automation.
Atul: The company terminated joint venture agreement signed with Elkay Kimyasal Maddeler SAN. TIC. A.S. based in Turkey (Eikay) for promoting stone care chemicals in India.
Tata Power: CRISIL reaffirmed the company’s long term AA – (Stable) and short term rating to A1+ after the clearance of all its dues.
S Chand and Company: CARE revised its rating on long term bank facilities of the company to A/Stable from AA-/Stable. Promoters Himanshu Gupta and Dinesh Kumar Jhunjhunwala bought 30,000 shares each.
Zee Entertainment Enterprises: The company said that upon a rating review by Brickwork Ratings India Pvt Ltd, the credit rating of 6 percent cumulative redeemable non-convertible preference shares issued by the company as bonus to its equity shareholders in 2014, has been placed on 'AA (Credit Watch with Negative Implications), from AAA (Credit Watch with Developing Implications)'.
SREI Infrastructure Finance: The company and PFS join hands to facilitate financing in the energy value chain.
Union Quality Plastics: Fire accident occurred on June 4 at its Umbergaon manufacturing facility.
KPR Mill: Buyback committee has fixed the record date as June 19 for the buyback of the company's equity shares.
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Analyst or Board Meet/Briefings
TVS Motor: The company's officials will meet Ward Ferry Management on June 10.
Brigade Enterprises: The company's officials will meet ICICI Prudential MF on June 10.
Hero Motocorp: Morgan Stanley India Conference is now scheduled for June 11, 2019 instead of June 12, 2019.
Max Ventures and Industries: Conference call on June 11 is organised for investors and analysts to discuss Q4 and FY19 financial results of the company.
Precision Camshafts: The company will be meeting investors and analysts on June 12.
Inox Leisure: The company's officials will meet analysts and investors on June 10.
Pudumjee Paper Products: Annual General Meeting to be held on July 27.
Mahindra Logistics: The company's officials will meet analysts and investors on June 10, 12 and 18.
Avanti Feeds: Audio conference call for investors will be held on June 12 to discuss the audited financial results for the quarter and the year that ended March 31, 2019.
Puravankara: Analysts and institutional investors meeting is scheduled on June 10 with ICICI Prudential AMC at Bengaluru.
Three stocks under F&O ban period on NSE
For June 10, DHFL, IDBI Bank and PC Jeweller are under the F&O ban period.Securities in ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.