The market has seen a correction for the first time in the last four consecutive sessions, falling a third of a percent on May 24 on weak global cues, and ahead of the expiry of monthly futures and options contracts on Thursday.
The BSE Sensex declined 208 points to 61,774, while the Nifty50 dropped 63 points to 18,285 and formed a Doji sort of candlestick pattern on the daily timeframe, indicating the tug of war between bulls and bears.
"On the daily chart, we observe that the Nifty has taken a breather in the last two sessions after recently bouncing back from the 20-day SMA (simple moving average). We therefore expect the uptrend to continue, despite selling seen in the last two sessions," Subash Gangandharan, Senior Technical and Derivative Analyst at HDFC Securities said.
Gangandharan says the immediate upside target for the Nifty is at 18,459 once the resistance of 18,420 is taken out. Moreover, as the longer time frame indicates that the Nifty remains in an uptrend, he believes that the immediate target of 18,459 is also likely to be taken out in the coming sessions.
Crucial support to watch for weakness is at 18,250, he said.
The increase in volatility also gave discomfort for bulls. India VIX, the fear index, increased by 4 percent to 13.11 levels, from 12.61 levels.
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, resistance levels on Nifty
Pivot charts indicate that the Nifty may get support at 18,264, followed by 18,233 and 18,184. If the index advances, 18,363 would be the key resistance level to watch out for followed by 18,394 and 18,443.
The Bank Nifty fell more than the benchmark Nifty50, declining 277 points to 43,678 and forming a small-bodied bearish candlestick pattern with a long upper shadow on the daily charts, indicating selling pressure at higher levels.
"The Relative Strength Index (RSI) is in a bearish crossover, indicating a negative sentiment. The support level is placed at 43,500; a fall below 43,500 may trigger a further correction in the Bank Nifty," Rupak De, Senior Technical at LKP Securities said.
Resistance levels are situated at 43,700 and 44,000, where Call writers are waiting with their positions, he feels.
As per the pivot point calculator, the Bank Nifty is likely to take support at 43,634, followed by 43,547 and 43,405. The key resistance level to watch out for would be 43,918, followed by 44,005, and 44,147.
On the monthly options front, the maximum Call open interest (OI) was at 18,400 strike, with 1.38 crore contracts, which is expected to be a crucial resistance level for the Nifty.
This was followed by 18,500 strike comprising 1.31 crore contracts and 18,300 strike with more than 1.15 crore contracts.
Call writing was seen at 18,300 strike, which added 41.52 lakh contracts, followed by 18,400 strike, which added 26.97 lakh contracts, and 18,500 strike, which added 21.69 lakh contracts.
Call unwinding was at 18,700 strike, which shed 15.71 lakh contracts, followed by 18,800 strike, which shed 10.66 lakh contracts, and 19,100 strike, which shed 10.11 lakh contracts.
The maximum Put open interest was at 18,200 strike, with 1.23 crore contracts, which is expected to be an important support in the coming sessions.
This was followed by the 18,300 strike, comprising 1.08 crore contracts, and 18,100 strike with 88.97 lakh contracts.
Put writing was seen at 18,200 strike, which added 8.39 lakh contracts, followed by 18,100 strike, which added 6.62 lakh contracts, and 17,800 strike, which added 5.38 lakh contracts.
Put unwinding was seen at 17,900 strike, which shed 18.03 lakh contracts, followed by 18,400 strike, which shed 16.98 lakh contracts, and 18,000 strike, which shed 15.93 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. The highest delivery was seen in Larsen & Toubro, InterGlobe Aviation, Abbott India, Nestle India, and TCS, among others.
An increase in open interest (OI) and price typically indicates a build-up of long positions. Based on the OI percentage, 29 stocks, including ONGC, Biocon, Power Finance Corporation, Manappuram Finance, and Petronet LNG saw long build-ups.
A decline in OI and price generally indicates a long unwinding. Based on the OI percentage, 55 stocks, including Whirlpool, Coforge, Cholamandalam Investment and Finance, Escorts, and M&M Financial Services saw long unwinding.
45 stocks see a short build-up
An increase in OI along with a price decrease indicates a build-up of short positions. Based on the OI percentage, 45 stocks, including ICICI Lombard General Insurance Company, Cummins India, Ashok Leyland, Page Industries, and HDFC AMC saw a short build-up.
A decrease in OI along with a price increase is an indication of short-covering. Based on the OI percentage, 60 stocks were on the short-covering list. These included Alkem Laboratories, IndusInd Bank, United Breweries, Dr Lal PathLabs, and Aarti Industries.
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Stocks in the news
Life Insurance Corporation of India: The LIC has recorded a standalone profit of Rs 13,427.8 crore for the quarter ended March FY23, growing 466 percent over the corresponding period last fiscal. The sequential growth in profit was 112 percent. Standalone net premium income fell by 8.3 percent year-on-year to Rs 1.31 lakh crore for the March FY23 quarter, but on a sequential basis, the said premium income increased by 17.9 percent.
FSN E-Commerce Ventures: The Nykaa operator has recorded consolidated profit at Rs 2.4 crore for quarter ended March FY23, falling 71.8 percent compared to the same period last fiscal despite strong topline and operating numbers, impacted by a high base in Q4FY22 due to tax write-back. Revenue from operations for the quarter grew by 33.7 percent to Rs 1,302 crore compared to the same quarter previous fiscal.
Oil India: The state-owned oil company has recorded standalone profit at Rs 1,788.3 crore for the March FY23 quarter, rising 2.4 percent over the previous quarter supported by higher other income, but impacted by tepid topline growth and weak operating numbers. Revenue from operations (net of excise duty) grew by 0.4 percent sequentially to Rs 5,398 crore in Q4FY23. The board recommended a final dividend of Rs 5.50 per share.
Infosys: The leading IT services firm has announced its collaboration with Adobe to transform the digital workforce through Infosys’ online learning platform, Infosys Springboard, under its Tech for Good charter. Both organisations will aim to create over 10,000 new Adobe-certified experts globally by 2025.
Garden Reach Shipbuilders & Engineers: The company has entered into a contract with Indian Navy for the supply of 10 in number 30 mm Naval Surface Gun (NSG) with electro-optical fire control system (EOFCS) and ammunition at a cost of Rs 248.51 crore. Profit for March FY23 quarter increased by 17.1 percent year-on-year to Rs 55.3 crore despite weak operating numbers, led by higher other income and topline. Revenue rose by 10.7 percent to Rs 601.2 crore compared to the year-ago period.
BL Kashyap and Sons: The civil engineering and construction company has secured new order worth Rs 132 crore from Indian School of Business. The total order book stood at Rs 2,650 crore till date.
Wipro: The technology services and consulting firm has announced a partnership between its Engineering Edge business line and Spartan Radar, an automated mobility sensor software provider, to build advanced vehicle solutions. Wipro’s corporate investment subsidiary Wipro Ventures has invested in Spartan Radar’s Series B funding round.
Foreign institutional investors (FIIs) bought shares worth Rs 1,185.84 crore, while domestic institutional investors (DIIs) purchased shares worth Rs 300.93 crore on May 24, provisional data from the National Stock Exchange showed.
Stocks under F&O ban on NSE
The National Stock Exchange has retained Delta Corp, and Indiabulls Housing Finance to its F&O ban list for May 25. 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.
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