The market is expected to continue its upward journey considering the formation of Bullish Hammer candlestick pattern (the bullish reversal pattern formed at the downtrend) on the daily charts and strong intraday trend reversal in the previous session. Hence, the Nifty 50 may face hurdle at 22,200-22,300 on the higher side and if the index manages to decisively close above 22,300 then northward journey towards 22,500-22,600 is possible, with support at 22,000-21,900 levels, experts said.
On May 13, the benchmark indices extended uptrend for yet another session. The BSE Sensex was up 112 points at 72,776, while the Nifty 50 climbed 49 points to close at 22,104 after a 283-points recovery from the day's low.
"On the higher side, band 22,300-22,320 could act as a resistance, while low of 21,821, registered on May 13 would remain support for the Nifty in the short term," Vinay Rajani, CMT, senior technical/derivative analyst at HDFC Securities said.
According to Osho Krishan, senior analyst - technical & derivative research at Angel One, the formation of Hammer candlestick on the daily chart after a series of sell-offs is signaling a reversal pattern, but it would be early to claim, and a follow-up session is required to confirm the same.
On the level-specific front, he said a series of supports can be seen from 22,000-21,900, followed by the sacrosanct support of the 89 DEMA around 21,800 zone. On the higher end, "22,200-22,300 is likely to act as intermediate resistance, and a sustainable surpass could only trigger a fresh round of longs in the system," he said.
Going ahead, Osho would likely to remain cautious amidst the rise in volatility, which may be deceptive and could trap traders on either side.
The India VIX, the fear gauge, more than doubled to 20.6 levels on May 13, from 10.2 on April 23, which indicates that the trend seems still in favour of bears and bulls are at uncomfortable position now.
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Key support and resistance levels on the Nifty and the Bank Nifty
The pivot point calculator indicates that the Nifty 50 may take immediate support at the 21,900 level, followed by 21,827 and 21,708 points. On the higher side, the index is expected to face resistance at the 22,138 level, followed by 22,211 and 22,330 points.
Meanwhile, the Bank Nifty closed in green for the first time in last nine consecutive sessions, rising 333 points to 47,754, and formed bullish candlestick pattern with long lower shadow on the daily charts after defending 100-day EMA (exponential moving average) as well as rising support trendline.
"The banking index has managed to hold on to the rising support trendline and also the lower end of the rising channel placed at 47,300. We expect a relief rally in the Bank Nifty till 48,480 – 48,500 from short term perspective," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
According to the pivot point calculator, the Bank Nifty index is likely to take support at 47,198, followed by 46,996 and 46,668. On the higher side, the index may see resistance at 47,854, followed by 48,057 and 48,385.
According to the weekly options data, the maximum Call open interest remained at 23,000 strike, with 62.81 lakh contracts. This level can act as a key resistance for the Nifty in the short term. It was followed by the 22,500 strike, which had 52.41 lakh contracts, while the 22,300 strike had 47.99 lakh contracts.
Meaningful Call writing was seen at the 22,600 strike, which saw an addition of 11.33 lakh contracts. It was followed by 22,400 and 22,300 strikes that added 9.57 lakh and 8.55 lakh contracts.
The maximum Call unwinding was visible in the 23,000 strike, which shed 5.63 lakh contracts, followed by 23,200 and 22,900 strikes, which shed 4.2 lakh and 3.44 lakh contracts, respectively.
On the Put side, the 21,000 strike owned the maximum open interest, which can act as a key support level for the Nifty with 57.55 lakh contracts. It was followed by the 21,500 strike, comprising 44.78 lakh contracts and then the 22,000 strike, with 40.29 lakh contracts.
The maximum Put writing was visible at the 21,800 strike, which saw an addition of 13.79 lakh contracts, followed by 21,500 and 21,900 strikes, with 11.82 lakh and 10.59 lakh contracts additions, respectively.
Put unwinding was observed at the 22,000 strike, which shed 5.3 lakh contracts. This was followed by 22,500 and 20,600 strikes, with a reduction of 2.64 lakh and 1.4 lakh contracts, respectively.
Stocks with high delivery percentage
A high delivery percentage reflects investor interest in a stock. Ipca Laboratories, HCL Technologies, Dabur India, Infosys, and SBI Life Insurance Company saw the highest delivery among the F&O stocks.
A long build-up was seen in 64 stocks, including Cipla, Astral, Siemens India, Aditya Birla Capital, and Dr Lal PathLabs. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, 23 stocks saw long unwinding, which included Hindustan Copper, Hero MotoCorp, Maruti Suzuki India, State Bank of India, and Punjab National Bank. A decline in OI and price indicates long unwinding.
37 stocks see a short build-up
A short build-up was seen in 37 stocks, including Piramal Enterprises, Tata Motors, Dixon Technologies, Bharat Electronics, and Shriram Finance. An increase in OI, along with a fall in price, points to a build-up of short positions.
Based on the OI percentage, 62 stocks saw short-covering, which included JK Cement, Gujarat Gas, Jindal Steel & Power, Bank of Baroda, and ABB India. A decrease in OI, along with a price increase, is an indication of short-covering.
The Nifty Put-Call ratio (PCR), which indicates the mood of the market, climbed to 0.97 on May 13, from 0.91 levels in the previous session.
The increasing PCR or higher than 0.7 or surpassing 1 means traders are selling more Put options than Calls options, which generally indicates the firming up of a bullish sentiment in the market. If the ratio falls below 0.7 or moves towards 0.5, then it indicates selling in Calls is higher than selling in Puts, reflecting a bearish mood in the market.
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Bharti Airtel, Shree Cement, Siemens, Apollo Tyres, Bajaj Electricals, Colgate-Palmolive (India), Bharti Hexacom, PVR Inox, BLS International Services, Devyani International, Ideaforge Technology, Oberoi Realty, Patanjali Foods, and V-Mart Retail will release March quarter earnings on May 14.
Stocks in News
Shriram Finance: The company said its board members have approved the sale of its housing finance subsidiary Shriram Housing Finance (SHFL) to global investor Warburg Pincus, for Rs 4,630 crore. Warburg Pincus will acquire the stake through its affiliate Mango Crest Investment from all the sellers.
DLF: The real estate major has recorded a massive 61.5 percent on-year growth in consolidated net profit at Rs 920.7 crore for quarter ended March FY24, with strong topline and operating numbers. Revenue from operations grew by 46.6 percent on-year to Rs 2,135 crore for the quarter.
Jindal Steel & Power: The company has reported consolidated net profit at Rs 933.5 crore for March FY24 quarter, growing 100.5 percent over the corresponding period of previous fiscal despite lower topline, aided by operating margin that boosted by lower input cost. The profit in Q4FY23 was impacted by an exceptional loss of Rs 153.5 crore. Revenue from operations declined 1.5 percent on-year to Rs 13,487 crore for the quarter.
Cochin Shipyard: The company has bagged a large order (in the range of Rs 500-1,000 crore) from a European client, for the design and construction of a hybrid service operation vessel (Hybrid SOV) with an option for two more such vessels.
Rail Vikas Nigam: The company has received Letter of Acceptance from Southern Railway for provision of automatic block signaling system in Jolarpettai junction to Erode junction of Salem division in Southern Railway. The order worth Rs 239.1 crore is expected to be executed within 12 months.
Funds Flow (Rs crore)
Foreign institutional investors (FIIs) net sold Rs 4,498.92 crore shares, while domestic institutional investors (DIIs) pumped in Rs 3,562.75 crore worth shares on May 13, provisional data from the NSE showed.
Stocks under F&O ban on NSE
The NSE has added Piramal Enterprises to the F&O ban list for May 14, while retaining Balrampur Chini Mills, Canara Bank, GMR Airports Infrastructure, Hindustan Copper, Vodafone Idea, Punjab National Bank, SAIL, and Zee Entertainment Enterprises to the said list.
Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.
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