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The formation of reversal and the bearish candlestick pattern could signal more weakness towards 13,765 levels in the next few sessions, says Nagaraj Shetti of HDFC Securities.

January 27, 2021 / 10:49 PM IST

The Nifty50 ended in the red for the fourth consecutive session and lost nearly 2 percent on January 27 on across-the-board selling, except FMCG sector, ahead of the expiry of current month's futures & options (F&O) contracts on January 28.

The S&P BSE Sensex plunged 937.66 points or 1.94 percent to 47,409.93, while the Nifty50 fell 271.40 points or 1.91 percent to 13,967.50 and formed a Bearish Belt Hold pattern on the daily charts.

"The crucial immediate supports of 10 period and 20 period EMA has been broken down and the upward sloping trendline (connecting October 30 and December 21, 2020 swing lows) has been violated lower around 14,350, as per daily timeframe chart," Nagaraj Shetti, Technical Research Analyst at HDFC Securities told Moneycontrol.

"The near term trend of Nifty continues to be negative and the recent all-time high of 14,753 could be considered as an important top reversal pattern. The formation of reversal and the bearish candlestick pattern could signal more weakness towards 13,765 levels and lower in the next few sessions. Any intraday rise up to 14,150 could be a sell on rise opportunity for short term," he said.

The broader markets closed mixed as the Nifty Midcap 100 index fell 1.58 percent and the Nifty Smallcap 100 index was up 0.15 percent.

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We have collated 15 data points to help you spot profitable trades:

Note: The open interest (OI) and volume data of stocks given in this story are the aggregates of three- month data and not of the current month only.

Key support and resistance levels on the Nifty

According to pivot charts, the key support levels for the Nifty are placed at 13,851.87, followed by 13,736.23. If the index moves up, the key resistance levels to watch out for are 14,160.57 and 14,353.63.

Nifty Bank

The Nifty Bank tanked 913.90 points or 2.93 percent to close at 30,284.50 on January 27. The important pivot level, which will act as crucial support for the index, is placed at 29,871.17, followed by 29,457.73. On the upside, key resistance levels are placed at 30,992.57 and 31,700.53.

Call option data

Maximum Call open interest of 50.01 lakh contracts was seen at 14,700 strike, which will act as a crucial resistance level in the January series.

This is followed by 14,500 strike, which holds 46.49 lakh contracts, and 14,100 strike, which has accumulated 40.36 lakh contracts.

Call writing was seen at 14,100 strike, which added 36.82 lakh contracts, followed by 14,200 strike which added 24.83 lakh contracts and 14,000 strike which added 17.53 lakh contracts.

Call unwinding was seen at 14,300 strike, which shed 5.92 lakh contracts, followed by 14,800 strike which shed 4.2 lakh contracts and 14,500 strike which shed 3.03 lakh contracts.

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Put option data

Maximum Put open interest of 31.50 lakh contracts was seen at 13,500 strike, which will act as crucial support level in the January series.

This is followed by 14,000 strike, which holds 28.70 lakh contracts, and 13,800 strike, which has accumulated 23.69 lakh contracts.

Put writing was seen at 13,900 strike, which added 6.97 lakh contracts, followed by 13,500 strike, which added 4.63 lakh contracts and 13,400 strike which added 2.85 lakh contracts.

Put unwinding was seen at 14,200 strike, which shed 13.41 lakh contracts, followed by 14,300 strike, which shed 10.13 lakh contracts and 14,400 strike which shed 6.46 lakh contracts.

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Stocks with a high delivery percentage

A high delivery percentage suggests that investors are showing interest in these stocks.

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8 stocks saw long build-up

Based on the open interest future percentage, here are the 8 stocks in which a long build-up was seen.

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82 stocks saw long unwinding

Based on the open interest future percentage, here are the top 10 stocks in which long unwinding was seen.

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36 stocks saw short build-up

An increase in open interest, along with a decrease in price, mostly indicates a build-up of short positions. Based on the open interest future percentage, here are the top 10 stocks in which a short build-up was seen.

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17 stocks witnessed short-covering

A decrease in open interest, along with an increase in price, mostly indicates a short-covering. Based on the open interest future percentage, here are the top 10 stocks in which short-covering was seen.

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Bulk deals

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(For more bulk deals, click here)

Results on January 28

Maruti Suzuki India, Lupin, InterGlobe Aviation, Colgate-Palmolive, 3i Infotech, Aarti Industries, Angel Broking, AU Small Finance Bank, Bharat Electronics, CCL Products, Coforge, Cummins India, DB Corp, eClerx Services, Engineers India, Equitas Small Finance Bank, Granules India, HSIL, IDBI Bank, Indus Towers, IRCTC, KEC International, KPIT Technologies, Laurus Labs, Mahindra & Mahindra Financial Services, Motilal Oswal Financial Services, Persistent Systems, Pidilite Industries, RBL Bank, Route Mobile, Shriram Transport Finance, Suven Life Sciences, Tata Chemicals, TVS Motor Company and Welspun Corp are among 129 companies that are slated to announce their quarterly earnings on January 28.

Stocks in the news

Axis Bank: The bank reported a sharply lower profit at Rs 1,116.6 crore for Q3FY21 against Rs 1,757 crore logged in the corresponding quarter of the previous fiscal, while net interest income (NII) rose to Rs 7,372.7 crore from Rs 6,453 crore YoY.

Hindustan Unilever: The company reported a profit of Rs 1,921 crore for December quarter (Q3FY21) against Rs 1,616 crore in Q3FY20. Revenue of the company jumped to Rs 11,862 crore from Rs 9,808 crore in the year-ago period.

NTPC: The company's 140 MW solar photovoltaic project in Uttar Pradesh started commercial operations.

State Bank of India: Swaminathan Janakiraman & Aswini Kumar Tewari have been appointed as Managing Directors of the bank for three years.

Tata Coffee: The company reported a higher consolidated profit of Rs 31.5 crore in Q3FY21 against Rs 24.9 crore in Q3FY20; revenue increased to Rs 532.7 crore from Rs 501.4 crore in Q3FY20.

JK Paper: The company reported a consolidated profit of Rs 65.9 crore in Q3FY21 against Rs 131.9 crore in Q3FY20, while revenue declined to Rs 744.9 crore from Rs 820.6 crore YoY.

Fund flow

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FII and DII data

Foreign institutional investors (FIIs) net sold shares worth Rs 1,688.22 crore, while domestic institutional investors (DIIs) net sold shares worth Rs 3.38 crore in the Indian equity market on January 27, as per provisional data available on the NSE.

Stocks under F&O ban on NSE

One stock - SAIL - is under the F&O ban for January 28. 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.
Sunil Shankar Matkar
first published: Jan 27, 2021 10:11 pm
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