The short-term trend of Nifty seems to have turned down and more weakness could be in store, said experts.
After showing a sideways range movement in the last four sessions, Nifty witnessed a sharp profit-booking on January 20 from the new all-time high of 12,430 to end over a percent lower at 12,224.
Investor sentiment took a hit after the December-quarter earnings of some heavyweight companies failed to meet the expectations of Dalal Street.
The 30-share pack Sensex hit a fresh all-time high of 42,273.87 but failed to hold altitude and ended the day with a loss of 416 points, or 0.99 percent, at 41,528.91.
Nifty also hit a fresh record high of 12,430.50 in early trade but settled 128 points, or 1.03 percent, down at 12,224.55.
Secondary barometers BSE Midcap and Smallcap indices outperformed Sensex, ending 0.57 percent and 0.39 percent lower, respectively.
"A large negative candle was formed today after a gap-up opening. This pattern indicates the formation of bearish engulfing of the last five trading sessions high low range. This is a negative pattern and one may expect today's swing high to be a crucial top reversal pattern. Follow-through weakness could confirm the reversal," said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The short-term trend of Nifty seems to have turned down and more weakness could be in store. The next lower levels to be watched are at 12,100, which could be reached in the next few sessions," Shetti added.
We have collated 14 data points to help you spot profitable trades:
Key support and resistance level for Nifty
According to the pivot charts, the key support level for Nifty is placed at 12,150.77, followed by 12,077.03. If the index continues moving up, key resistance levels to watch out for are 12,364.37 and 12,504.23.
Nifty Bank closed 1.61 percent down at 31,080.65. The important pivot level, which will act as crucial support for the index, is placed at 30,779.77, followed by 30,478.83. On the upside, key resistance levels are placed at 31,652.77 and 32,224.83.
Call options data
Maximum call open interest (OI) of 32.60 lakh contracts was seen at the 12,500 strike price. It will act as a crucial resistance level in the January series.
This is followed by 12,400 strike price, which holds 24.33 lakh contracts in open interest, and 12,300, which has accumulated 24.14 lakh contracts in open interest.
Significant call writing was seen at the 12,300 strike price, which added 9 lakh contracts, followed by 12,400 strike price that added 5.97 lakh contracts and 12,500 strike that added 4.36 lakh contracts.
Call unwinding was witnessed at 12,700 strike price, which shed 1.88 lakh contracts, followed by 12,000 which shed 42,450 contracts.
Put options data
Maximum put open interest of 36.18 lakh contracts was seen at 12,000 strike price, which will act as crucial support in the January series.
This is followed by 12,200 strike price, which holds 24.51 lakh contracts in open interest, and 12,300 strike price, which has accumulated 17.90 lakh contracts in open interest.
Put writing was seen at the 12,300 strike price, which added 3.51 lakh contracts, followed by 12,200 strike, which added 2.91 lakh contracts.
Put unwinding was seen at 12,000 strike price, which shed 1.46 lakh contracts.
Stocks with a high delivery percentage
A high delivery percentage suggests that investors are showing interest in these stocks.
15 stocks saw long build-up
55 stocks saw long unwinding
Based on open interest (OI) future percentage, here are the top 10 stocks in which long unwinding was seen.
56 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 open interest (OI) future percentage, here are the top 10 stocks in which short build-up was seen.
21 stocks witnessed short-covering
A decrease in open interest, along with an increase in price, mostly indicates a short-covering. Based on open interest (OI) future percentage, here are the top 10 stocks in which short-covering was seen.
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Upcoming analyst or board meetings/briefings
Indian Overseas Bank: The board of the lender will meet on January 21 to consider and approve the preferential issue of shares.
Manaksia Aluminium Company: The board will meet on January 21 to consider and approve the rights issue of equity shares, increase in authorised capital and quarterly results.
Repro India: The board of the lender will meet on January 21 to consider and approve a scheme of arrangement.
Spectrum Foods: The board of the lender will meet on January 21 to consider and approve the preferential issue of shares.
Stocks in news
Results: Zee Entertainment, ICICI Prudential Life Insurance Company, HDFC Asset Management Company, Havells India, Tejas Networks, Syschem India, Polycab India, Newgen Software Technologies, IndiaMART InterMESH, Gujarat Investa and Granules India are among the companies that will release their December quarter numbers on January 21.
NBCC: Company will provide consultancy for a project worth Rs 720 cr to Central Coalfield.
KEI Industries: Q3 profit jumped 50.4 percent to Rs 72.5 cr, revenue grew 20.8 percent to Rs 1,314.2 cr YoY.
IDBI Bank: Bank sold 17.90 lakh shares (0.36 percent equity) of National Stock Exchange.
SREI Infra: Board will consider raising up to Rs 3,000 cr on February 14.
FII and DII data
Foreign institutional investors (FIIs) bought shares worth Rs 5.87 crore, while domestic institutional investors (DIIs) sold shares of worth Rs 1,419.85 crore in the Indian equity market on January 20, provisional data available on the NSE showed.