Nagaraj Shetti of HDFC Securities said the downside breakout of immediate supports at 10,980-10,960 levels could mean renewed selling enthusiasm in the market after a range move.
Broad-based selling dragged benchmark indices for the second consecutive session on August 21, despite strong European cues.
The BSE Sensex plunged 267.64 points to 37,060.37 while the Nifty 50 lost 98.30 points to close below 11,000 levels, at 10,918.70, forming a bearish candle on the daily charts.
Experts feel the bearish bias may continue in coming session also if the index breaks its August lows.
"Intense selling pressure pushed the Index below 5-EMA. The bearish bias to continue further that can extend towards the previous low of 10,782 levels; however, a sustained move above 11,000 marks will be the first sign of trend reversal," Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors told Moneycontrol.
Nagaraj Shetti, Technical Research Analyst at HDFC Securities also said the downside breakout of immediate supports at 10,980-10,960 levels could mean renewed selling enthusiasm in the market after a range move.
The current chart pattern could indicate more weakness in the short term and the next lower supports to be watched are at 10,780-10,750 levels in the next few sessions, he added.
Among sectors, Nifty Metal fell most with loss of nearly 3 percent followed by Bank and FMCG which declined nearly a percent each. The correction in broader markets was quite high compared to benchmarks as the Nifty Midcap index fell 1.6 percent and Smallcap index lost 1.9 percent.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
Nifty closed at 10,918.70 on August 21. According to the pivot charts, key support level is placed at 10,872.2, followed by 10,825.7. If the index starts moving upward, key resistance levels to watch out for are 10,999.7 and 11,080.7.
Nifty Bank closed at 27,719.05, down 263.40 points on August 21. The important pivot level, which will act as crucial support for the index, is placed at 27,557.24, followed by 27,395.37. On the upside, key resistance levels are placed at 27,989.94 and 28,260.77.
Call options data
Maximum Call Open Interest (OI) of 33.28 lakh contracts was seen at the 11,000 strike price. It will act as a crucial resistance level in the August series.
This is followed by 11,500 strike price, which now holds 24.43 lakh contracts in open interest, and 11,200, which has accumulated 24.34 lakh contracts in open interest.
Significant Call writing was seen at the 11,000 strike price, which added 7.18 lakh contracts, followed by 11,100 strike price, which added 6.05 lakh contracts and 11,200 strike which added 3.86 lakh contracts.
Call Unwinding was seen at 11,600 strike price, which shed 0.84 lakh contracts, followed by 11,700 strike, which shed 0.82 lakh contracts.
Put options data
Maximum Put Open Interest of 35.31 lakh contracts was seen at 11,000 strike price, which will act as crucial support in August series.
This is followed by 10,500 strike price, which now holds 21.6 lakh contracts in Open Interest, and 10,800 strike price, which has now accumulated 21.49 lakh contracts in open interest.
Put writing was seen at the 10,600 strike price, which added 2.24 lakh contracts, followed by 10,500 strike, which added 1.32 lakh contracts and 10,900 strike, which added 0.46 lakh contracts.
Put unwinding was seen at the 11,000 strike price, which shed 2.81 lakh contracts, followed by 11,100 strike that shed 1.22 lakh contracts and 10,800 strike price which shed 1.18 lakh contracts.
Stocks with a high delivery percentage
A high delivery percentage suggests that investors are accepting delivery of the stock, which means investors are bullish on it.
12 stocks saw a long buildup
16 stocks that saw short-covering
A decrease in open interest, along with an increase in price, mostly indicates a short covering.
80 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.
56 stocks saw long unwinding
Analyst or Board Meetings/Briefings
Jai Corp: 34th Annual General Meeting to be held on September 30.
Ahluwalia Contracts: Company will participate in investors meet with IIFL Institutional Equities on August 22.
Kaveri Seed Company: 32nd Annual General Meeting will be held on September 17.
Fredun Pharmaceuticals: Company has scheduled a Conference Call for the stakeholders on August 26.
ITC: Company's representative(s) will be attending, through video conferencing, the 'India Consumer Reverse Roadshow 2019' being organised by DSP Merrill Lynch Limited on August 23.
Greenlam Industries: Officials of the company will be meeting the analysts/investors to discuss the financial results on August 22 and 23.
Indian Energy Exchange: Company's officials will meet Motilal Oswal Private Equity and attend IIFL Caravan Pit-Stop Delhi (IIFL conference) on August 22.
Torrent Power: Company's officials will meet Quantum Advisors on August 22.
RITES: Company is participating in 'Railways and Cables & Wires Conference' on August 22 to be organized by Reliance Securities in Mumbai.
Mukand: Extraordinary General Meeting of the company will be held on September 13.
Marathon Nextgen Realty: 42nd Annual General Meeting of the company to be held on September 26.
Advanced Enzyme Technologies: Company's officials will interact with the fund manager from APG Investments Asia on August 22.
Stocks in the news
Results on August 22: Everest Kanto Cylinder, Gillette India, Advance Lifestyles, Birla Cotsyn, Kennametal India, Supreme Infrastructure India
LIC Housing Finance: Fidelity Management to sell stake in the company, the book size at $200 million - CNBC-TV18 sources.
Coffee Day Enterprises clarifies: Reports of ITC considering buying a stake in the company are incorrect.
NMDC: Company cut iron ore lump, fines prices by Rs 200 per tonne from August 20.
Redington India: ICICI Prudential Life sold 2.05 percent stake in the company on August 20.
Jai Corp: Company decided to merge a wholly-owned subsidiary, Jai Realty Ventures Limited with itself.
Tata Sponge Iron: Company received approval to change the name from ‘Tata Sponge Iron' to ‘Tata Steel Long Products Ltd’
Kansai Nerolac Paints (KNPL): Business Transfer Agreement has been entered into by and between Nerofix Private Limited (incorporated in terms of the joint venture agreement, paid-up equity share capital of which is held by KNPL and Polygel in the ratio of 60:40), Polygel, Promoters of Polygel and KNPL.
Infosys: Company expanded strategic partnership with Google Cloud to help clients accelerate their digital transformation with Cloud.
Tasty Dairy Specialities: CRISIL has reaffirmed its 'BBB-/Stable' rating on the long-term bank facilities.
JMT Auto Q1: Consolidated loss at Rs 0.85 crore against loss at Rs 9.2 crore; revenue falls to Rs 121.55 crore versus Rs 141.2 crore YoY.
Jagran Prakashan: Commercial Paper of Rs 65 crore has been redeemed on August 19, i.e. on the maturity date.
Urja Global: Company has withdrawn agreement with Nippon Shinyaku Co. Ltd, Japan for the supply of product i.e. Zacobite for the five years, to avoid any further misunderstanding between the stakeholders and the company.
BHEL: India Ratings & Research has affirmed the company's long-term issuer rating at 'AA+'. However, the outlook has been revised from 'Stable' to 'Negative'.
NCL Industries: CRISIL reaffirmed long term and short term credit rating.
Aspira Pathlab & Diagnostics: Company approved the issue and allotment of up to 38 lakh equity shares at an issue price Rs 26 per share to strategic investors not forming part of promoter or promoter group, on a preferential basis.
Electrosteel Castings: Company approved the proposal for raising of funds by issuance of 2,74,72,526 equity shares on a preferential basis.
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FII & DII data
Foreign Institutional Investors (FIIs) sold shares worth net Rs 770.81 crore, while Domestic Institutional Investors (DIIs) bought net Rs 353.97 crore worth of shares in the Indian equity market on August 21, as per provisional data available on the NSE.
Fund Flow Picture
2 stocks under F&O ban period on NSE
On August 22, DHFL and IDBI Bank are under F&O ban.Securities under the ban period in the F&O segment include companies in whose security has crossed 95 percent of the market-wide position limit.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.