Nagaraj Shetti of HDFC Securities feels the underlying short-term trend of Nifty continues to be weak amidst a range movement.
Benchmark indices started the week on a bearish note due to weakness in global markets and sell-off in FMCG and banking stocks.
The 30-share BSE Sensex was down 156.28 points at 35,853.56 while the Nifty50 managed to defend 10,700 levels, down 57.40 points at 10,737.60 and formed 'Bearish Belt Hold' kind of pattern on the daily charts.
"The underlying short term trend of Nifty continues to be weak amidst a range movement. 10,700-10,680 levels is going to be a crucial lower support to hold on," Nagaraj Shetti, Technical Research Analyst at HDFC Securities, told Moneycontrol.
A decisive move below this support could be considered as a downside breakout of a triangle pattern, he added.
A 'Bearish Belt Hold' pattern is formed when the opening price becomes the highest point of the trading day (intraday high) and the index declines throughout the trading day making up for the large body. The candle will either have a small or no upper shadow and a small lower shadow.
"The Nifty has been forming lower tops on the daily chart; however, a lower bottom is yet to be seen. The swing low is placed at 10,628. Breach of the same would mean complete signal of the trend reversal as per the Dow Theory," Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas told Moneycontrol.
He said the weekly momentum indicator has completed the pullback cycle till the equilibrium line & is ready for the new cycle on the downside, and the daily momentum indicator has given a fresh sell signal with a bearish hook formation.
"All these observations suggest that a sharp fall can be seen towards 10,333 once the swing low of 10,628 breaks. On the higher side, 10,850-10,870 becomes a crucial hurdle zone for the index," he added.
The broader markets also traded in line with benchmark indices as the Nifty Midcap index was down 0.4 percent and Smallcap fell 0.3 percent.
The Nifty Bank, Financial Service, IT, metal and realty indices were down between 0.5 percent and 1 percent while Pharma was the only gainer among sectoral indices, up half a percent.
We have collated top 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
The Nifty closed at 10,737.60 on January 14. According to Pivot charts, the key support level is placed at 10,683.93, followed by 10,630.27. If the index starts moving upward, key resistance levels to watch out are 10,799.63 and then 10,861.67.
The Nifty Bank index closed at 27,248.25, down 205.65 points on January 14. The important Pivot level, which will act as crucial support for the index, is placed at 27,157, followed by 27,065.8. On the upside, key resistance levels are placed at 27,364.6, followed by 27,481.
Call Options Data
Maximum Call open interest (OI) of 49.22 lakh contracts was seen at the 11,000 strike price. This will act as a crucial resistance level for the January series.
This was followed by the 10,900 strike price, which now holds 35.33 lakh contracts in open interest, and 11,200, which has accumulated 34.25 lakh contracts in open interest.
Meaningful Call writing was seen at 10,900, which added 5.18 lakh contracts, followed by 10,800 strike which added 3.05 lakh contracts and 11,000 strike which added 2.3 lakh contracts.
There was hardly any Call unwinding seen.
Put Options data
Maximum Put open interest of 38.38 lakh contracts was seen at the 10,500 strike price. This will act as a crucial support level for the January series.
This was followed by the 10,700 strike price, which now holds 34.55 lakh contracts in open interest, and the 10,600 strike price, which has now accumulated 28.09 lakh contracts in open interest.
Significant Put writing was seen at the strike price of 10,600, which added 2.4 lakh contracts, followed by 10,300 strike which added 1.32 lakh contracts.
Put unwinding was seen at the strike price of 10,900 which shed 1.57 lakh contracts, followed by 10,800 strike which shed 1.15 lakh contracts.
FII & DII data
Foreign Institutional Investors (FIIs) sold shares worth Rs 732.46 crore while Domestic Institutional Investors purchased Rs 527.49 crore worth of shares in the Indian equity market on January 14, 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.
31 stocks saw a long buildup
36 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
70 stocks saw a short build-up
An increase in open interest along with a decrease in price mostly indicates a build-up of short positions.
64 stocks saw long unwinding
Bulk Deals on January 14
Ajooni Biotech: Prism Medico and Pharmacy sold 48,000 shares of the company at Rs 29 per share on the NSE.
InfoBeans Techno: Maven India Fund sold 10,00,000 shares of the company at Rs 65.52 per share on the NSE.
PG Electroplast: Ashit Mahendra Mehta sold 92,479 shares of the company at Rs 109.9 per share on the NSE.
(For more bulk deals, click here)
Analyst or Board Meet/Briefings
Wockhardt: Board meeting is scheduled on January 28 to consider the unaudited financial results (standalone and consolidated) of the company for the quarter and nine months ended December 2018.
Mukand Engineers: Board meeting is scheduled on February 12 to consider the unaudited financial results of the company for the quarter ended December 2018.
HDFC Bank: Bank will host an earnings call with analysts and investors on January 19, wherein the senior management will discuss the financial results with the participants.
V2 Retail: Board meeting is scheduled on January 25 to consider the financial results for the quarter ended December 2018.
Essel Propack: Board meeting is scheduled on January 23 to consider the unaudited financial results of the company's India standalone and consolidated of global operation for the third quarter and nine months ended December 2018.
Apar Industries: Board meeting is scheduled on January 29 to consider the un-audited financial results of the company, on standalone as well as on consolidated basis, for the third quarter and nine months ended December 2018.
Jindal Saw: Board meeting is scheduled on January 24 to consider the un-audited financial results for the 9 months/3rd quarter ended December 2018.
Reliance Nippon Life Asset Management: Board meeting is scheduled on January 22 to consider the unaudited financial results of the company for the nine months/ quarter ended December 2018 and the interim dividend on the equity shares of the company.
Castrol India: Board meeting is scheduled to be held on January 30 to consider the audited financial results of the company for the financial year ended December 2018 and to recommend dividend, if any, for the year ended December 2018.
FDC: Board meeting is scheduled on February 8 to consider the unaudited financial results of the company for the quarter and nine months ended December 2018.
Stocks in news
Results on Tuesday: Zee Entertainment Enterprises, Trident, Tinplate Company of India, Jay Bharat Maruti, Den Networks, TV18 Broadcast, Hindustan Media Ventures, KPIT Technologies, Speciality Restaurants, Network18 Media & InvestmentsBoard meetings on Tuesday: R Systems International for share buyback,
Nahar Industrial Enterprises and Indo Rama Synthetics (India) for fund raising.
Tata Metaliks Q3: Profit falls to Rs 39.63 crore versus Rs 40.35 crore, revenue rises to Rs 546.4 crore versus Rs 489.9 crore YoY.
Tata Power: Resurgent Power is a joint venture based out of Singapore and is held 26 percent by Tata Power through its wholly-owned Singapore based subsidiary. Now the balance 74 percent of Resurgent Power is held by ICICI Bank, Power Platform Limited and Kuwait Investment Authority.
Punj Lloyd: Pengeramg invoked $58 million performance bond for project. Company achieved 99 percent of engineering project for Pengeramg and is in talks with Pengeramg for refund of bond amount.
ICICI Bank: Bank appoints B Sriram & Rama Bijapurkar as additional (independent) directors.
Vakrangee: Company launched 3,300+ NextGen Vakrangee Kendras across India.
2 stocks under ban period on NSE
Securities in ban period for the next day's trade under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.For January 15, Adani Power and Jet Airways is present in this list.