Equity benchmark indices fell 1 percent for second day in a row on March 10, tracking weakness in global counterparts after turmoil in the US banking space. The sell-off in banking & financial services caused the maximum damage to equity markets. Select metal, auto, and technology stocks were also under pressure.
The BSE Sensex corrected 671 points to 59,135, while the Nifty50 dropped 177 points to 17,413 and formed Hammer kind of candlestick pattern on the daily charts, which is generally a bullish reversal pattern, though for the week, with one percent loss the index has formed Bearish Engulfing sort of candle on the weekly scale.
"Normally, such hammer formation post reasonable decline alert for trend reversal on the upside after confirmation. Nifty on the weekly chart formed a long bear candle after a minor upside bounce of last week," said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
He feels the short term trend of Nifty continues to be weak.
Having formed an unfilled downside gap and a formation of positive candle pattern of Friday indicates possibility of minor upside bounce for the market, which is likely to be a sell-on-rise opportunity for next week, the expert said, adding that immediate resistance is around 17,600 levels and the next lower supports to be watched is at 17,250.
The broader markets also corrected but the fall was tad lower than benchmarks. The Nifty Midcap 100 index was down 0.75 percent and Smallcap 100 index declined 0.9 percent.
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 the Nifty
As per the pivot charts, the Nifty has support at 17,348, followed by 17,318 and 17,269. If the index moves up, the key resistance levels to watch out for are 17,445, followed by 17,475 and 17,523.
The Bank Nifty plunged 771 points or 1.87 percent to 40,485 and formed a bearish candlestick pattern on the daily charts as most of stocks participated in the correction.
On the weekly chart, a dark cloud cover pattern is formed, indicating a bearish reversal in the trend as the index was down 1.86 percent.
"On the daily chart, the index has fallen below its 14-day moving average, indicating bearishness. On the lower end, the index may drift down towards 39,650–39,500. On the higher end, 41,000 is likely to remain a resistance," said Rupak De, Senior Technical Analyst at LKP Securities.
The important pivot level, which will act as a support, is at 40,365, followed by 40,248 and 40,058. On the upside, key resistance levels are 40,745, followed by 40,863, and 41,053.
On a weekly basis, we have seen the maximum Call open interest (OI) at 18,000 strike, with 1.01 crore contracts, which may remain a crucial hurdle on the higher side, for the Nifty in the coming sessions.
This is followed by a 17,500 strike, comprising 83.25 lakh contracts, and a 17,700 strike, where there are more than 67.51 lakh contracts.
Call writing was seen at 17,500 strike, which added 75.1 lakh contracts, followed by 18,000 strike, which gave an addition of 57.17 lakh contracts, and 17,400 strike which saw 50.93 lakh contracts addition.
We have seen Call unwinding at 18,200 strike, which shed 12.18 lakh contracts, followed by 18,600 strike which shed 1.38 lakh contracts, and 18,500 strike which shed 56,100 contracts.
Put option data
On a weekly basis, the maximum Put OI was seen at 17,400 strike, with 60.34 lakh contracts, which is expected to act as a crucial support zone for the Nifty50 in coming sessions.
This is followed by the 17,300 strike, comprising 47.82 lakh contracts, and the 17,000 strike, where we have 41.92 lakh contracts.
Put writing was seen at 17,400 strike, which added 40.98 lakh contracts, followed by 17,300 strike with 26.64 lakh contracts, and 16,500 strike with 16.11 lakh contracts.
We have seen Put unwinding at 17,600 strike, which shed 16.78 lakh contracts, followed by 17,700 strike which shed 11.03 lakh contracts, and 17,800 strike which shed 2.62 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in these stocks. The highest delivery was seen in City Union Bank, Balkrishna Industries, Ipca Laboratories, Sun Pharmaceutical Industries, and Infosys, among others.
An increase in open interest (OI) and an increase in price mostly indicate a build-up of long positions. Based on the OI percentage, 25 stocks including United Breweries, Ipca Laboratories, Dixon Technologies, JSW Steel, and Bajaj Auto, witnessed a long build-up.
In most cases, a decline in OI and a decrease in price indicate a long unwinding. Based on the OI percentage, 55 stocks including Mahanagar Gas, Larsen & Toubro, GNFC, ONGC, and Firstsource Solutions witnessed a long unwinding.
85 stocks see a short build-up
An increase in OI accompanied by a decrease in price mostly indicates a build-up of short positions. Based on the OI percentage, 85 stocks including Polycab India, Persistent Systems, RBL Bank, PVR, and Reliance Industries, saw a short build-up.
A decrease in OI along with an increase in price is an indication of short-covering. Based on the OI percentage, 27 stocks were on the short-covering list. These included Honeywell Automation, Gujarat Gas, Shriram Finance, Torrent Power, and Bajaj Auto.
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Investors' meetings on March 13
Windlas Biotech: Officials of the company will interact with Aditya Khemka of InCred Financial Services, and Ashish Kila of Perfect Research.
Alkem Laboratories: Company officials will interact with Karma Capital, Kotak Mutual Fund, and American Century Investment.
Indian Energy Exchange: Officials of the company will interact with William Blair.
Bharti Airtel: Company officials will meet analysts and institutional investors.
Stocks in the news
Lumax Auto Technologies: The auto ancillary company has completed the acquisition of 75 percent shareholding in IAC International Automotive India through its wholly-owned subsidiary Lumax Integrated Ventures. Accordingly, IAC India has become the step-down subsidiary of the company and subsidiary of Lumax Integrated Ventures with immediate effect.
Welspun Corp: Subsidiary Welspun Metallics has received multiple export orders of 43 KMT for pig iron across South East Asia and Europe. These orders will be executed within next two months.
ICICI Bank: The country's second-largest private sector lender has received approval from the Reserve Bank of India for extension of time till September 9, 2024 for divesting its shareholding in ICICI Lombard General Insurance Company to less than 30 percent. ICICI Bank holds 48.02 percent stake in ICICI Lombard General Insurance Company as of December 2022
Lupin: The United States Food and Drug Administration (US FDA) has completed a pre-approval and GMP inspection of Lupin's API manufacturing facility in Visakhapatnam (Vizag), India, with no observations. The inspection was conducted during March 6 - March 10, 2023.
Lloyds Metals and Energy: The Central Government has granted Environmental Clearance and Maharashtra Pollution Control Board has issued Consent to Operate, for the enhanced iron mining capacity of 10 million tonnes per annum, from 3 million tonnes per annum. Company remains confident of mining, handling, and selling the total quantity of 10 MMT iron ore in FY24. In addition, the company has also re-assessed its iron ore reserves in existing mines and preliminary reports suggested reserves of 180+ million tonnes.
Gateway Distriparks: HDFC Mutual Fund through its several schemes has bought additional 2.02 percent stake in the logistics company via open market transactions on March 8. With this, the fund house increased its stake to 7.10 percent, up from 5.09 percent earlier.
Ambuja Cements: Gautam Adani is seeking to sell a stake in Ambuja Cements worth about $450 million, as part of efforts to reduce debt and restore investor confidence in his conglomerate, a Financial Times report said. Adani owns 63 percent stake in Ambuja Cements. The newspaper said it learnt from three company sources, who are privy to the development, that Adani issued a formal request to global lenders for selling 4 percent to 5 percent stake in the cement business.
IndusInd Bank: The Reserve Bank of India has approved re-appointment of Sumant Kathpalia as Managing Director & CEO of the bank for further 2 years with effect from March 24, 2023.
Fund Flow
Foreign institutional investors (FII) sold shares worth Rs 2,061.47 crore, whereas domestic institutional investors (DII) bought shares worth Rs 1,350.13 crore on March 10, the National Stock Exchange's provisional data showed.
Stocks under F&O ban on NSE
The National Stock Exchange has retained Balrampur Chini Mills and GNFC in its F&O ban list for March 13. 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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