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Trade setup for Thursday: Top 15 things to know before the opening bell

Based on the open interest future percentage, there were 113 stocks, in which short-covering was seen include Nifty Financial, L&T Finance Holdings, Hero MotoCorp, MCX India, and Firstsource Solutions.

October 06, 2022 / 10:48 AM IST

On October 4, the market recouped all its previous day's losses and climbed more than 2 percent, tracking positive global cues. The rally across sectors also boosted northward journey of the market.

The BSE Sensex surged 1,277 points, or 2.25 percent, to 58,065, while the Nifty50 jumped 387 points to 17,274 and formed bullish candle on the daily charts.

"A long bull candle was formed on the daily chart with gap up opening (body gap, not a western gap). This indicates an upside breakout of the larger consolidation movement around 16,800-17,200 levels," Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

The immediate hurdle of previous opening gap of September 26 has been filled on Tuesday at 17,290 levels. This is positive indication and a sustainable move above 17,300 levels could be a sharper one towards the next crucial resistances of around 17,600 and next 18,000 levels in the near term.

Nifty has now respected the important lower support of 16,800 levels, as per the concept of change in polarity. Immediate support is placed at 17,150 levels, the market expert said.

The broader markets also traded strong with the Nifty Midcap 100 and Smallcap 100 indices rising 2.6 percent and 1.76 percent, respectively, while the India VIX, the fear index fell by 8.4 percent to 19.57 levels, making the trend favourable for bulls.

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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 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 17,165, followed by 17,056. If the index moves up, the key resistance levels to watch out for are 17,335 and 17,396.

Nifty Bank

The Nifty Bank was key driver for the market. The index spiked 1,080 points to 39,110 and formed bullish candlestick pattern on the daily charts on October 4. The important pivot level, which will act as crucial support for the index, is placed at 38,745, followed by 38,381. On the upside, key resistance levels are placed at 39,326 and 39,542 levels.

CALL OPTION DATA

Maximum Call open interest of 28.2 lakh contracts was seen at 18,000 strike, which can act as a crucial resistance level in the October series.

This is followed by 17,000 strike, which holds 16.4 lakh contracts, and 17,500 strike, which has 16.26 lakh contracts.

Call writing was seen at 17,200 strike, which added 3.89 lakh contracts, followed by 17,300 strike which added 3.39 lakh contracts, and 18,400 strike which added 2.13 lakh contracts.

Call unwinding was seen at 17,000 strike, which shed 10.47 lakh contracts, followed by 18,200 strike which shed 3.85 lakh contracts and 17,100 strike which shed 2.64 lakh contracts.

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PUT OPTION DATA

Maximum Put open interest of 28.19 lakh contracts was seen at 16,000 strike, which can act as a crucial support level in the October series.

This is followed by 16,500 strike, which holds 26.41 lakh contracts, and 17,000 strike, which has accumulated 25.46 lakh contracts.

Put writing was seen at 17,200 strike, which added 6.63 lakh contracts, followed by 17,500 strike, which added 2.52 lakh contracts, and 17,300 strike which added 2.42 lakh contracts.

Put unwinding was seen at 17,000 strike, which shed 3.88 lakh contracts, followed by 16,900 strike which shed 1.49 lakh contracts and 16,800 strike which shed 1.15 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. The highest delivery was seen in HDFC, REC, Abbott India, Mphasis, and ICICI Bank, among others.

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77 stocks saw long build-up

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, here are top 10 stocks in which a long build-up was seen included City Union Bank, IDFC First Bank, Crompton Greaves Consumer Electricals, Delta Corp, and Escorts.

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No stock in long unwinding

A decline in open interest, along with a decrease in price, mostly indicates a long unwinding. We don't have a single stock in the list of long unwinding on Tuesday.

7 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 7 stocks in which a short build-up was seen include Gujarat State Petronet, Dabur India, Power Grid Corporation of India, Motherson Sumi Systems, and Marico.

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113 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 include Nifty Financial, L&T Finance Holdings, Hero MotoCorp, MCX India, and Firstsource Solutions.

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Bulk Deals

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(For more bulk deals, click here)

Investors Meetings on October 6

Investors Meetings 0610

Allcargo Logistics: Officials of the company will interact with MK Ventures.

Max Ventures and Industries: Officials of the company will meet investors and analysts in Singapore.

Infibeam Avenues: Officials of the company will meet Lucky Investment Managers, and Credit Suisse Securities (India).

Stocks in News

JSW Energy: Subsidiary JSW Neo Energy has entered into a Memorandum of Understanding with the Government of Maharashtra for setting up a 960 MW capacity of Hydro Pumped Storage Project in Maharashtra. With this MoU, the company has secured resources for ~6 GW hydro PSPs with various states governments.

Atul Auto: The company said the board of directors will meet on October 8 to consider the proposal for raising of funds via rights issue, or preferential issue including a qualified institutions placement.

Sterlite Technologies: The company has completed its divestment of stake in IDS UK. In September 2022, it had entered into definitive documents to sell its stake (through its wholly-owned subsidiary) in Impact Data Solutions, UK (IDS UK) to Hexatronic Group AB.

Tata Steel: The company through subsidiary T S Global Holdings Pte Ltd has completed the divestment of its 19% equity stake in AI Rimal to Tanmia. With this, its shareholding in Al Rimal reduced from 70% to 51%. For the said stake sale, Tata Steel subsidiary had entered into an agreement with Oman National Investments Development Company (Tanmia) and the existing shareholders of Al Rimal.

Godrej Consumer Products: The FMCG company, at a consolidated level, expects to deliver higher than mid single-digit sales growth. It expects close to double digit sales growth ex-Indonesia's Hygiene comparator. On the profitability front, it expect a mid-teen decline in EBITDA due to consumption of high cost materials, significant upfront marketing investments to drive category development, and a weak performance in Indonesia. However, with significant correction in commodities like palm oil derivatives and crude oil, we expect recovery in consumption, gross margins expansion and upfront marketing investments in upcoming quarters.

Jubilant FoodWorks: Subsidiary Jubilant Foodworks Netherlands B.V. acquired additional stake in Netherlands-based DP Eurasia N.V. As on October 3, subsidiary is holding 49.04% stake in DP Eurasia, the exclusive master franchisee of the Domino’s Pizza brand in Turkey, Russia, Azerbaijan and Georgia.

Fund Flow

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FII and DII data

Foreign institutional investors (FIIs) remained net buyers to the tune of Rs 1,344.63 crore, while domestic institutional investors (DIIs) net purchased shares worth Rs 945.92 crore on October 4, as per provisional data available on the NSE.

Stocks under F&O ban on NSE

The National Stock Exchange has not added any stock under its F&O ban list for October 6. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95 percent of the market-wide position limit.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sunil Shankar Matkar
first published: Oct 5, 2022 03:41 pm