The market extended selling pressure for the second consecutive session on December 7, following a slightly hawkish tone by the Reserve Bank of India in its December policy meeting. The central bank raised the repo rate by 35 bps to 6.25 percent and lowered the full-year growth forecast.
The BSE Sensex fell 216 points to 62,411, while the Nifty50 slipped 82 points to 18,560 and formed a bearish candlestick pattern on the daily charts, indicating temporary nervousness among bulls. But experts said having it above the 18,500 mark still raised the possibility of renewal of the uptrend in coming sessions.
"A long bear candle was formed on the daily chart that placed at the edge of moving below the support of 18,550-18,500 levels. This pattern indicates continuation of weakness in the market and lack of strength to sustain the intraday highs," Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.
But he says the positive chart pattern like higher tops and bottoms is still active. He expects the Nifty to bounce back from the support 18,450 levels.
If the lower support gets broken, then the market could test another lower base of around 18,150 levels, while immediate resistance is placed at 18,650 levels, the market expert said.
The broader markets were also under pressure with the Nifty Midcap 100 and Smallcap 100 indices declining 0.6 percent each.
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 of the current month.
Key support and resistance levels on the Nifty
As per the pivot charts, the key support level for the Nifty is placed at 18,532, followed by 18,499 & 18,446. If the index moves up, the key resistance levels to watch out for are 18,639 followed by 18,672 and 18,726.
The Nifty Bank also corrected 40 points to 43,099, but performed better than broader markets on December 7. The important pivot level, which will act as crucial support for the index, is placed at 42,980, followed by 42,891 and 42,746 levels. On the upside, key resistance levels are placed at 43,270 followed by 43,359 & 43,504 levels.
We have seen the maximum Call open interest at 19,000 strike, with 34.82 lakh contracts, which can act as a crucial resistance level in the December series.
This is followed by 20,000 strike, which holds 24.66 lakh contracts, and 18,700 strike, which have more than 18.53 lakh contracts.
Call writing was seen at 18,600 strike, which added 2.71 lakh contracts, followed by 18,700 strike, which added 1.61 lakh contracts, and 18,900 strike which added 1.39 lakh contracts.
Call unwinding was seen at 20,000 strike, which shed 69,350 contracts, followed by 19,900 strike which shed 66,500 contracts and 19,300 strike which shed 65,250 contracts.
We have seen a maximum Put open interest at 18,000 strike, with 31.58 lakh contracts which can act as a crucial support level in the December series.
This is followed by 18,500 strike, which holds 30.58 lakh contracts, and 17,000 strike, which has accumulated 25.81 lakh contracts.
Put writing was seen at 18,500 strike, which added 3.06 lakh contracts, followed by 18,600 strike, which added 79,450 contracts and 17,600 strike which added 53,550 contracts.
Put unwinding was seen at 18,200 strike, which shed 1.45 lakh contracts, followed by 19,000 strike which shed 68,600 contracts and 18,000 strike which shed 46,250 contracts.
Stocks with a high delivery percentage
A high delivery percentage suggests that investors are showing interest in these stocks. We have seen the highest delivery in HDFC Bank, HDFC, Sun Pharmaceutical Industries, ICICI Bank, and HDFC Life Insurance Company, among others.
An increase in open interest, along with an increase in price, mostly indicates a build-up of long positions. Based on the open interest future percentage, we have seen a long build-up in 23 stocks on Wednesday, including HDFC AMC, Siemens, Power Finance Corporation, REC, and AU Small Finance Bank.
A decline in open interest, along with a decrease in price, mostly indicates a long unwinding. Based on the open interest future percentage, 59 stocks have seen a long unwinding on Wednesday including Escorts, Punjab National Bank, Apollo Tyres, Whirlpool, and Polycab India.
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, we have seen a short build-up in 84 stocks on Wednesday including Nifty Financial, Crompton Greaves Consumer Electrical, Delta Corp, Alkem Laboratories, and Jubilant Foodworks.
29 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, we have 29 stocks on the short-covering list on Wednesday including Ramco Cements, Hindustan Petroleum Corporation, InterGlobe Aviation, Larsen & Toubro, and Chambal Fertilizers.
New Delhi Television: LTS Investment Fund sold 5.46 lakh equity shares in the company via open market transactions at an average price of Rs 358.53 per share.
Elantas Beck India: Nippon India Mutual Fund purchased 2.15 lakh shares in the company at an average price of Rs 4,100 per share. However, Pinebridge Investments Asia Limited A/C PB Global Funds-Pinebridge India EQ Fund sold 2.16 lakh shares at an average price of Rs 4,100.01 per share.
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Investors Meetings on December 8
Sundram Fasteners: Officials of the company will interact with Motilal Oswal and Nippon Mutual Fund.
Syngene International: Officials of the company will interact with Enam AMC.
Allcargo Logistics: Officials of the company will interact with First State Investments (Asia), and attend Motilal Oswal CAPEX Conclave.
Tata Chemicals: Officials of the company will interact with Acacia Partners, and HSBC Securities and Capital Markets (India).
Cipla: Officials of the company will interact with BNP Paribas, and Aditya Birla Sun Life Mutual Fund.
Eicher Motors: Officials of the company will interact with SBI Life Insurance.
Stocks in News
Inox Wind: The company allotted 0.01 percent non-convertible, non-cumulative, participating, redeemable preference shares of Rs 10- each on a private placement basis to Inox Leasing and Finance Limited, the ultimate holding company for a cash consideration of Rs 600 crore. The company repaid Gujarat Fluorochemicals Rs 623 crore against advances.
Infosys: India’s second-largest IT services company commenced its fourth share buy-back amounting to Rs 9,300 crore. The buy-back will be at a price not greater than Rs 1,850 per equity share having a face value of Rs 5 each through the open market route. The company will be utilising at least 50 percent of the maximum amount fixed for the buyback i.e. Rs 4,650 crore.
Eveready Industries: Eveready Industries appoints Bibek Agarwala as the new CFO w.e.f. February 14, 2023. He replaces Indranil Roy Chowdhury and Bibhu Ranjan Saha, who had earlier been designated as Joint Chief Financial Officers of the company.
Metro Brands: The company completes a 100 percent acquisition of Cravatex Brands. Cravatex is engaged in the business of importing, trading, selling, marketing, advertising, retailing and distributing footwear, apparel and accessories under various brands including ‘FILA’ and ‘Proline’.
VA Tech Wabag: The company appointed Pankaj Malhan as Deputy MD and Group CEO, effective December 7. The company also re-designated Rajiv Mittal as Chairman and Managing Director effective December 07.
Macrotech Developers: Macrotech Developers fixes QIP offer floor price at Rs 1,022.75 per share. The company and the selling shareholders may offer a discount of not more than 5 percent on the floor price. The relevant date for the purpose of the offer is fixed as December 7.
HCL Technologies: HCLTech Teams up with Intel and Mavenir to Deliver Critical 5G Enterprise Technology Solutions. Through this new collaboration, the companies will work closely on a wide and comprehensive range of projects and activities across enablement, go-to-market and sales acceleration, with the goal of delivering more 5G solutions to CSPs, IoT and enterprise verticals.
IL&FS Transportation: The company will sell its 50 percent stake in the joint venture Hazaribagh Ranchi Expressway Limited (HREL). It assigned road JV receivables amounting to Rs 40 crore to Roadstar Infra Investment Trust
Lumax Industries: The company will set up a new greenfield project at Chakan, Pune involving a capex of Rs 175 crore for phase 1. The project will service the orders received from OEMs for advanced lighting solutions. The project is expected to be commissioned by Q2FY24 and will be financed by a mix of debt and internal accruals. The company may also avail long-term credit facilities for this project.
Fund Flow
Foreign institutional investors (FIIs) have net sold shares worth Rs 1,241.87 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 388.85 crore on December 7, as per provisional data available on the NSE.
Stocks under F&O ban on NSE
The National Stock Exchange has retained Punjab National Bank, GNFC, and Indiabulls Housing Finance, under its F&O ban list for December 8. Securities thus 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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