Bears have tightened their hold on D-Street, which is evident from the fact that the widely tracked Supertrend indicator gave a sell signal on the charts on Monday.
The Nifty, which started on a positive note, failed to gather momentum and close marginally above its crucial support placed at 10,500 levels on Monday, making a solid bear candle on the daily charts.
The index slipped for a fifth consecutive session in a row. It broke below its crucial support placed at 50-DEMA, and 100-DMA placed at 10,557, and 10,538 respectively.
Bears have tightened their hold on D-Street, which is evident from the fact that the widely tracked Supertrend indicator gave a sell signal on the charts on Monday. MACD gave a sell signal on daily charts last week.
As the name suggests, 'Supertrend' is a trend following indicator just like Moving Averages and MACD (Moving Average Convergence Divergence). It is plotted on prices and their placement indicates the current trend. The MACD also gave a Sell signal in the previous trading session.
The Nifty index has a strong support near 10,500 levels but as long as the index holds below 10,550 there is a higher probability of the index testing lower support placed at 10,300-10,400 levels, suggest experts.
The Nifty which opened at 10,616 rose to an intraday high of 10,621 but then bulls took control and pushed the index below 10600 levels. The index slipped to an intraday low of 10,505 before closing 79 points lower at 10,516.
“The Nifty continued its slide for the 5th session in a row before signing off the first day of the week with a strong bearish candle. In this process it is fast approaching its 50-day simple moving average which in the past offered strong resistance to the indices on their pullback attempt after the major fall from 11171 levels,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.
“In the technical analysis if particular level offers a strong resistance then on a breakout above that point shall turn into a strong support. Hence, the current downswing shall ideally find support around its 50-day SMA whose value for next session is placed around 10459 levels,” he said.
Mohammad further added that we could see a pullback attempt in next one or two sessions, but on the downside, support is placed in the zone of 10,459 – 10,300 levels whereas strength can be expected on a close above 10,630 levels.
India VIX moved up by 1.84 percent at 14.41 levels. On the options front, maximum Put OI is placed at 10,500 followed by 10,600 strikes while maximum Call OI is placed at 11,000 followed by 10,800 strikes.
We have collated the top 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
The Nifty closed at 10,516.7 on Monday. According to Pivot charts, the key support level is placed at 10,474.43, followed by 10,432.17. If the index starts moving upwards, key resistance levels to watch out are 10,590.33 and 10,663.97.
The Nifty Bank index closed at 25,750.8 on Monday. The important Pivot level, which will act as crucial support for the index, is placed at 25,601.8, followed by 25,452.8. On the upside, key resistance levels are placed at 25,983.3, followed by 26,215.8.
Call Options data
In terms of open interest, the 11,000 Call option has seen the most call writing so far at 57.27 lakh contracts. This could act as a crucial resistance level for the index in the May series.
The second-highest buildup has taken place in the 10,800 Call option, which has seen 50.06 lakh contracts getting written so far. The 10,700 Call option has accumulated 39.61 lakh contracts.
Call writing was seen at the strike price of 10,600, which added 13.78 lakh contracts, followed by 10,700, which added 5.97 lakh contracts, and 10,500, which added 5.62 lakh contracts.
Call unwinding was seen at the strike price of 10,900, which shed 2.18 lakh contracts, followed by 10,800, which shed 1.52 lakh contracts, and 11,000, which shed 1.21 lakh contracts.
Put Options data
Maximum open interest in put options was seen at a strike price of 10,500, in which 54.32 lakh contracts been added till date. This could be a crucial resistance level for the index in May series.
The 10,000 put option comes next, having added 33.41 lakh contracts so far, and the 10,600 put option, which has now accumulated 31.20 lakh contracts.
During the session, put writing was seen the most at a strike price of 10,200, with 1.5 lakh contracts being added, followed by 9,900, which added 1.32 lakh contracts.
Put unwinding was seen at a strike price of 10,700, in which 7.23 lakh contracts were shed, followed by 10,600, which shed 5.71 lakh contracts and 10,800, which shed 2.69 lakh contracts.
FII & DII data:
Foreign institutional investors (FIIs) sold shares worth Rs 496.03 crore, while domestic institutional investors bought shares worth Rs 1,190.56 crore in the Indian equity market on Monday, as per provisional data available on the NSE.
Fund flow picture:
Stocks with high delivery percentage:
High delivery percentage suggests that investors are accepting delivery of the stock, which means that investors are bullish on it.
10 stocks saw long buildup
39 stocks saw short covering:
A decrease in open interest along with an increase in price mostly indicates short covering.
74 stocks saw short build-up:
An increase in open interest along with a decrease in price mostly indicates build-up of short positions.
85 stocks saw long unwinding
ADF Foods Limited: M/S Mentor Capital Limited bought 4,79,500 shares at Rs 263.72 per share
IndoStar Capital Fin Ltd: NWB PLC as Trustee Jupiter India FD bought 4,93,059 shares at Rs 600 per share
Reliance Communications: Sistema Shyam Teleservices Limited sold 250,00,000 shares at Rs 14.36 per share
Sintex Plastics Tech Ltd: Morgan Stanley France SAS bought 44,90,918 shares at Rs 51.98 per share
(For more bulk deals, click here)
Analyst or Board Meet/Briefings:
Tata Steel: The company will have a meeting with ICICI Prudential AMC on May 22, 2018.
Sudarshan Chemicals: The company will hold analysts’ meeting on May 24, 2018.
PPAP Automotive: The company will hold its investors’ conference on May 22, 2018.
Bajaj Corp: Multiple investors will be meeting the company on May 22, 2018.
Stocks in news:
Redington India: The firm reported a dip of 6 percent in its Q4 net profit at Rs 143 crore.
Future Retail: The company has reported a net loss of Rs 463.6 crore for the March quarter against a profit of Rs 123 crore last year.
Bank of Baroda: Company launches MSME factory in Gurgaon to promote funding to small biz
State Bank of India: Company likely to report loss in Q4FY18 on rise in provisions, NPAs
7 stocks under ban period on NSE
Securities in ban period for the next day's trade under the F&O segment includes companies in which the security has crossed 95 percent of the market-wide position limit.For May 22, 2018, Balrampur Chini, DHFL, Jet Airways, Just Dial, PC Jeweller, Reliance Communications, and Wockhardt are present in this list.