Jimeet Modi of SAMCO Securities & StockNote advised traders must book profits in over-bought counters and not initiate any fresh longs at the current moment
Benchmark indices hit record highs in the opening on April 18 but wiped gains in the first half an hour of trade. This could be partly because of profit booking as all sectoral indices closed in the red.
The market was shut on April 19 for Good Friday.
The BSE Sensex fell 135.36 points to close at 39,140.28 on April 18 despite positive global cues while the Nifty50 declined 34.35 points to 11,752.80 and formed 'Bearish Belt Hold' or 'Dark Cloud Cover' kind of patterns on daily charts.
For the truncated week, the 50-share index gained 0.94 percent and formed small bullish candle on the weekly scale after a brief consolidation in the penultimate week.
The overall structure is expected to remain strong given but bulls need to struggle more which could take it above psychological 12,000 level while the index has to defend its near term support of 11,700 to maintain uptrend, experts said.
"The price action indicates that though the trend is positive, bulls will have to put in extra efforts going ahead. On the flip side, the bulls managed to defend the gap area of 11,731-11,704, which will continue to act as a near terms support zone," Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan told Moneycontrol.
He said overall structure suggests that the index has scope to march towards the psychological mark of 12,000 with potential to head till 12,170 in the short term. Major support for the Nifty is at the swing low of 11,550, he added.
"The near term trend of Nifty is still positive, but the market is struggling to sustain the all-time highs. Still, there is no formation of significant reversal patterns on the charts. Hence, 11,850-11,900 is going to be a strong overhead resistance for the next week," Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.
Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote said charts indicate that previous resistance levels are now acting as support for Nifty at 11,730 and if markets continue to weaken further, it will fail to surpass the new highs.
Hence traders must book profits in over-bought counters and not initiate any fresh longs at the current moment, he advised.
On April 18, the Nifty Midcap index lost 0.93 percent and Smallcap index declined 1.5 percent. For the week, the indices fell 0.5 percent and 0.9 percent, respectively.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
Nifty closed at 11,752.80 on April 18. According to the Pivot charts, the key support level is placed at 11,708.8, followed by 11,664.8. If the index starts moving upward, key resistance levels to watch out are 11,826.5 and 11,900.2.
The Nifty Bank index closed at 30,223.40, down 307.95 points on April 18. The important Pivot level, which will act as crucial support for the index, is placed at 30,020.46, followed by 29,817.53. On the upside, key resistance levels are placed at 30,548.07, followed by 30,872.73.
Call options data
Maximum Call open interest (OI) of 31.65 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 25.27 lakh contracts in open interest, and 11,900, which has accumulated 20.83 lakh contracts in open interest.
Significant Call writing was seen at 11,800 strike price, which added 6.94 lakh contracts, followed by 12,000 strike price that added 6.82 lakh contracts and 11,900 strike price that added 5.21 lakh contracts.
Call unwinding was seen at the strike price of 11,400 that shed 0.36 lakh contracts, followed by 11,500 strike price that shed 0.17 lakh contracts and 11,600 strike price that shed 0.16 lakh contracts.
Put options data
Maximum Put open interest of 28.43 lakh contracts was seen at 11,500 strike price. This will act as a crucial support level for the April series.
This was followed by 11,700 strike price, which now holds 22.33 lakh contracts in open interest and 11,600 strike price, which has now accumulated 20.97 lakh contracts in open interest.
Put writing was seen at the strike price of 11,400 that added 5.13 lakh contracts, followed by 11,600 strike price that added 1.98 lakh contracts and 11,300 strike price that added 0.93 lakh contracts.
Put unwinding was seen at the strike price of 11,700, which shed 0.61 lakh contracts, followed by 11,500 strike price that shed 0.31 lakh contracts and 12,000 strike price that shed 0.13 lakh contracts.
FII & DII data
Foreign Institutional Investors (FIIs) bought shares worth Rs 1,038.46 crore while Domestic Institutional Investors (DIIs) sold Rs 337.59 crore worth of shares in the Indian equity market on April 18, 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.
13 Stocks saw a long buildup
21 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
89 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.
74 stocks saw long unwinding
Bulk Deals on April 18
(For more bulk deals, Click Here)
Analyst or Board Meet/Briefings
Syngene International: Board meeting is scheduled on April 24 to consider a proposal for issue of bonus shares.
Gujarat State Fertilizers & Chemicals: Company will announce its FY19 earnings on May 22.
Raymond: Company will announce its FY19 earnings on April 30.
Wockhardt: Company will announce its FY19 earnings on May 6.
ICICI Securities: Company will host an earnings call with analysts and investors on April 23 to discuss the financial results of the company.
Bharti Infratel: Board to recommend/declare dividend, if any, in its meeting scheduled to be held on April 24.
KPR Mill: Board meeting will be held on April 29 to consider audited financial results for the year ended March 2019, recommendation of dividend, if any; and the proposal for buyback of shares.
SBI: Executive Committee on April 24 to examine the status of fundraising up to $2.5 billion planned in single/multiple tranches.
Stocks in news:
Results on April 22: AU Small Finance Bank, Goa Carbon, Mahindra Lifespace Developers, Abirami Financial Services, Ashika Credit Capital, Jumbo Bag, Lux Industries, QGO Finance, Sacheta Metals, Sadhana Nitrochem, Shiva Cement, Swaraj Engines, Systematix Securities, Tejas Networks, VTM
Tata Coffee Q4: Profit jumps to Rs 10.49 crore versus Rs 6.46 crore; revenue increases to Rs 460.52 crore versus Rs 440.43 crore YoY.
Gravita India: Gravita Tanzania commences commercial production of lead from its plant situated at Tanzania, East Africa.
GKB Ophthalmics: Board accepted the resignation of Gaurav Gupta, Promoter, Non-Executive Director, from the post of Director and as a member of the Audit Committee.
Reliance Home Finance: Brickwork Ratings revised rating to A+ (credit watch with negative implications) for company's long-term debt programme, market-linked debentures, subordinated debt and non-convertible debentures (NCDs) public issue; and to A (credit watch with negative implications) for upper Tier-II NCDs, inter-alia, due to revision of rating of the parent company, Reliance Capital Limited.
CARE Ratings revised its rating to BBB+ (credit watch with developing implications) for company's long-term debt programme, market linked debentures, subordinated debt and non-convertible debentures (NCDs) public issue; and to BBB (credit watch with developing implications) for upper Tier-II NCDs, due to revision of rating of the parent company, Reliance Capital Limited.
Reliance Capital: Brickwork Ratings revised rating to A+ (credit watch with negative implications) for long-term debt program, market-linked debentures and subordinated debt of the company, due to extension of timeline for progress of planned disinvestments in various companies.
CARE Ratings revised its rating to A (credit watch with developing implications) for long-term debt programme, market-linked debentures and subordinated debt of the company, due to extension of timeline for progress of planned divestments in various companies.
FCS Software Solutions: Board approved the scheme of amalgamation providing for the merger of its wholly owned subsidiaries, Insync Business Solutions, Innova E Services, Stablesecure Infraservices, Cgain Analytics and Zero Time Constructions with FCS Software Solutions.
Dr Reddy's Labs: USFDA classified company's Srikakulam unit as 'Voluntary Action Indicated' (VAI).
Larsen & Toubro: CCI approves the acquisition of electrical & automation business of L&T by Schneider & Macritchie.
Reliance Industries Q4: Profit grows 1.1 percent to Rs 10,362 crore versus Rs 10,251 crore; revenue declines 11.3 percent to Rs 1.38 lakh crore versus Rs 1.56 lakh crore QoQ.
Reliance Jio Q4: Profit rises 1.1 percent to Rs 840 crore versus Rs 831 crore; revenue increases 7 percent to Rs 11,106 crore versus Rs 10,383 crore QoQ.
Jet Airways: Etihad spokesperson said Aviation Group sees significant value generation from ownership & management of Jet Privilege Program (Reuters).
DHFL: Crisil downgrades company's commercial paper worth Rs 850 crore to A3+ from A2+
Corporation Bank: Brickwork revises the outlook on the rating of bank's bonds to stable.
Bank of Baroda: Srei Equipment Finance and BoB to offer joint loans for infrastructure equipment under a new agreement.
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 22, IDBI Bank, Idea Cellular, PC Jeweller and Reliance Capital are present in this list.
Out of F&O Ban: DHFL, Jet Airways, Reliance Power, WockhardtDisclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust that controls Network18 Media & Investments Ltd.