According to Nagaraj Shetti of HDFC Securities, this downward corrective leg is likely to continue in the Nifty for the next session and could reach the next support levels of 11,280 in the next couple of sessions.
Benchmark indices saw sharp selling pressure on May 8 with the Sensex falling nearly 500 points and the Nifty breaking 11,400 levels as bears retained charge on Dalal Street.
Trade tensions between the US & China, global growth concerns and mixed quarterly earnings dented market sentiment.
The market fell for the sixth straight session. The BSE Sensex tanked 487.50 points to 37,789.13 while the Nifty 50 plunged 138.40 points to 11,359.50 forming a bearish candle on the daily scale.
The Nifty has breached the junction of the 40-day exponential moving average, the daily lower Bollinger & lower end of a falling channel with a decisive margin which shows the bears are having an upper hand on the index and are determined to push the index further down, experts said.
"The expanding daily Bollinger Bands are assisting the bulls in their task. The intraday momentum indicators, however, are showing oversold readings. This may result into a minor degree bounce till 11,450-11,480," Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas told Moneycontrol.
Nevertheless, the bounce should be used as a selling opportunity, he said suggesting sell on a rise would be the strategy going ahead. "From a short term perspective, 11,100-11,000 will be the target area."
According to Nagaraj Shetti – Senior Technical & Derivative Analyst, HDFC Securities, this downward corrective leg is likely to continue in the Nifty for the next session and could reach the next support levels of 11,280 in the next couple of sessions.
The selling was across sectors with Nifty Bank, Auto, Pharma and Realty indices falling 1-2 percent while the Nifty Midcap index dropped 1 percent and Smallcap index fell 1.3 percent.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
Nifty closed at 11,359.45 on May 8. According to the Pivot charts, the key support level is placed at 11,311.3, followed by 11,263.1. If the index starts moving upward, key resistance levels to watch out are 11,443.4 and 11,527.3.
The Nifty Bank index closed at 28,994.40, down 293.80 points on May 8. The important Pivot level, which will act as crucial support for the index, is placed at 28,876.7, followed by 28,759. On the upside, key resistance levels are placed at 29,186.7, followed by 29,379.
Call options data
Maximum Call open interest (OI) of 8.74 lakh contracts was seen at the 11,800 strike price. This will act as a crucial resistance level for the May series.
This was followed by 11,700 strike price, which now holds 7.79 lakh contracts in open interest, and 11,500, which has accumulated 5.92 lakh contracts in open interest.
Significant Call writing was seen at the strike price of 11,500, which added 1.59 lakh contracts, followed by 11,900 strike that added 1.49 lakh contracts.
Call unwinding was seen at the strike price of 11,000 that shed 0.17 lakh contracts.
Put options data
Maximum Put open interest of 24.66 lakh contracts was seen at 11,000 strike price. This will act as a crucial support level for the May series.
This was followed by 11,500 strike price, which now holds 19.43 lakh contracts in open interest and 11,800 strike price, which has now accumulated 16.30 lakh contracts in open interest.
Put writing was seen at the strike price of 11,000 which added 1.42 lakh contracts, followed by 11,400 strike that added 1.19 lakh contracts and 10,900 strike which added 0.71 lakh contracts.
Significant Put unwinding was seen at the strike price of 11,500, which shed 1.36 lakh contracts, followed by 11,700 strike price that shed 0.73 lakh contracts and 11,600 strike price that shed 0.64 lakh contracts.
FII & DII data
Foreign Institutional Investors (FIIs) sold shares worth Rs 701.5 crore while Domestic Institutional Investors (DIIs) bought Rs 232.95 crore worth of shares in the Indian equity market on May 8, 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.
16 stocks saw a long buildup
27 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
87 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.
65 stocks saw long unwinding
Bulk Deals on May 8
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Analyst or Board Meet/Briefings
Strides Pharma Science: Company will host earnings call with analysts and investors on May 10.
Solara Active Pharma Sciences: Board meeting is scheduled on May 16 to consider March quarter results.
Cera Sanitaryware: Company will host Q4 & FY2019 earnings conference call on May 16.
Take Solutions: Board will consider FY19 results & final dividend on May 16.
City Union Bank: Board will consider FY19 results & dividend on May 17.
Ujjivan Financial Services: Company will announce March quarter earnings on May 30.
Stocks in news:
Results on May 9: HCL Technologies, Asian Paints, Apollo Tyres, Voltas, Mahanagar Gas, Shankara Building Products, South Indian Bank, Astra Microwave Products, Baba Arts, Cineline India, Centenial Surgical Suture, Cybertech Systems and Software, Dai-Ichi Karkaria, Dalmia Bharat, Datamatics Global Services, DE Nora India, Esab India, Fairchem Speciality, Gayatri Sugars, Gala Global Products, Gujarat Mineral Development Corporation, Granules India, Grovy India, Gujarat State Petronet, GTL Infrastructure, HCC, Hikal, Hinduja Ventures, Hindustan Media Ventures, ICRA, Inspirisys Solutions, Indian Overseas Bank, Kalpataru Power Transmission, Khaitan Chemicals, Mangalam Drugs, Manorama Industries, Matrimony.com, Mcdowell Holdings, MT Educare, NHC Foods, Nitta Gelatin India, Oracle Financial Services, Huhtamaki PPL, Plastiblends India, PNB Housing Finance, PTL Enterprises, Saint-Gobain Sekurit India, Satia Industries, Solar Industries, Stovec Industries, Sundram Fasteners, Superior Finlease, Sutlej Textiles & Industries, Timex Group India, Varun Beverages, Vardhman Textile
KEC International Q4: Profit fell to Rs 194 crore versus Rs 195.66 crore; revenue grew to Rs 3,841 crore versus Rs 3,662.4 crore YoY.
Hindalco Industries: Subsidiary Novelis Q4 net income was $103 million, adjusted EBITDA was $357 million, and net sales was $3.1 billion.
Titan Company Q4: Consolidated profit rose to Rs 348.3 crore versus Rs 304.41 crore; revenue jumped to Rs 4,888.77 crore versus Rs 4,107.22 crore YoY.
JMC Projects Q4: Profit jumped to Rs 48.70 crore versus Rs 34.28 crore; revenue rose to Rs 937.5 crore versus Rs 723 crore YoY.
Kokuyo Camlin Q4: Profit fell to Rs 4.5 crore versus Rs 5.8 crore; revenue grew to Rs 194 crore versus Rs 190.2 crore YoY.
Tata Communications Q4: Consolidated loss was at Rs 198.82 crore versus profit at Rs 173.3 crore; revenue fell to Rs 4,243.5 crore versus Rs 4,269.5 crore QoQ.
Alembic Pharmaceuticals Q4: Profit jumped to Rs 123.7 crore versus Rs 93.99 crore; revenue rose to Rs 927 crore versus Rs 853.3 crore YoY.
Great Eastern Shipping Company: Company delivered its 1994 built Very Large Gas Carrier 'Jag Vishnu' to the buyers. The vessel was contracted for sale in January 2019.
Dilip Buildcon: Subsidiary DBL Mangalwedha Solapur Highways Private Limited received financial closure letter from the National Highways Authority of India for four-laning of Sangli-Solapur section of NH-166.
Bharat Financial Inclusion: Company assigned a pool of receivables of an aggregate value of Rs 1,107.41 crore to one of the largest private sector banks on a direct assignment basis.
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