Shabbir Kayyumi, Head of Technical Research, Narnolia Financial Advisors said Index has formed a bearish big body candlestick pattern, indicating selling pressure on higher side & strong bearish momentum in progress.
The market started off the F&O expiry week on a negative note and continued its downtrend for the second consecutive session on April 22 with the Nifty closing tad below 11,600 levels. Rising crude oil prices to over five-month high dented traders sentiment.
The BSE Sensex broke the psychological 39,000 level, falling sharply by 495.10 points or 1.26 percent to close at 38,645.18 while the Nifty 50 plunged 158.30 points or 1.35 percent to 11,594.50 and formed 'Bearish Belt Hold' pattern on daily charts.
Nifty closed below 20 DMA, an important moving average considered for short term suggesting short term trend reversed to a downtrend, experts said.
"The opening price for the day turned out to be the highest point for the day, resulting into another Bearish Belt Hold candle on the daily chart. Also, the gap up opening on April 16 along with today's gap down opening has left a bearish Island on the daily chart," Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas told Moneycontrol.
He said all these bearish developments are jeopardizing the rally to a great extent.
"On the downside, the swing low of 11,550 holds the key for further course of action. Breach of the swing low on closing basis shall entitle the Nifty for a deeper correction," 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.
Shabbir Kayyumi, Head of Technical Research, Narnolia Financial Advisors said Index formed a bearish big body candlestick pattern, indicating selling pressure on higher side & strong bearish momentum in progress.
As long as Nifty is trading below 5 EMA trading around 11,673 levels, it can extend down move towards immediate crucial support of line of parity placed at 11,540 levels, he added.
Moreover, a decisive close above 11,700 will only change the current sentiment, he said.
Selling was seen across sectors barring Nifty IT (up 0.44 percent). Bank, Auto, Financial Service and Metal indices fell 1.8 percent each.
The broader markets also caught in a bear trap with the Nifty Midcap and Smallcap indices falling 1.8 percent each.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
Nifty closed at 11,594.45 on April 22. According to the Pivot charts, the key support level is placed at 11,543.33, followed by 11,492.17. If the index starts moving upward, key resistance levels to watch out are 11,686.33 and 11,778.17.
The Nifty Bank index closed at 29,687.95, down 535.45 points on April 22. The important Pivot level, which will act as crucial support for the index, is placed at 29,460.37, followed by 29,232.83. On the upside, key resistance levels are placed at 30,102.67, followed by 30,517.43.
Call options data
Maximum Call open interest (OI) of 41.58 lakh contracts was seen at the 11,700 strike price. This will act as a crucial resistance level for the April series.
This was followed by 12,000 strike price, which now holds 41.49 lakh contracts in open interest, and 11,800, which has accumulated 30.21 lakh contracts in open interest.
Significant Call writing was seen at 11,700 strike price, which added 29.02 lakh contracts, followed by 12,000 strike price that added 9.84 lakh contracts and 11,600 strike price that added 7.07 lakh contracts.
Call unwinding was seen at the strike price of 12,100 that shed 1.04 lakh contracts, followed by 11,500 strike price that shed 0.25 lakh contracts and 11,100 strike price that shed 0.23 lakh contracts.
Put options data
Maximum Put open interest of 24.53 lakh contracts was seen at 11,500 strike price. This will act as a crucial support level for the April series.
This was followed by 11,600 strike price, which now holds 18.52 lakh contracts in open interest and 11,400 strike price, which has now accumulated 17.30 lakh contracts in open interest.
Put writing was seen at the strike price of 11,100 that added 1.15 lakh contracts, followed by 11,300 strike price that added 0.61 lakh contracts.
Put unwinding was seen at the strike price of 11,800, which shed 8.87 lakh contracts, followed by 11,700 strike price that shed 8.41 lakh contracts and 11,500 strike price that shed 3.9 lakh contracts.
FII & DII data
Foreign Institutional Investors (FIIs) bought shares worth Rs 73.08 crore while Domestic Institutional Investors (DIIs) sold Rs 68.16 crore worth of shares in the Indian equity market on April 22, as per provisional data available on the NSE.
Fund flow picture
Stocks with a high delivery percentage
High delivery percentage suggests investors are accepting the delivery of the stock, which means that investors are bullish on it.
13 Stocks saw a long buildup
16 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
110 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.
60 stocks saw long unwinding
Bulk Deals on April 22
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Analyst or Board Meet/Briefings
Hindustan Copper: Board to mull raising funds via QIP on April 25.
Texmaco Rail: Board to consider raising funds via equity on April 25.
Stocks in news:
Results on April 23: ACC, Indiabulls Real Estate, Indiabulls Integrated Services, ICICI Securities, Bharat Seats, Coromandel International, Menon Bearings, Nucleus Software Exports, Sasken Technologies, Soril Infra Resources, Sterlite Technologies, Tata Global Beverages, Ushdev International
NSE to discontinue F&O contracts in 34 stocks from June 28: Ajanta Pharma, Allahabad Bank, BEML, Can Fin Homes, CEAT, CG Power and Industrial Solutions, Chennai Petroleum, DCB Bank, Godfrey Phillips, Godrej Industries, GSFC, IDFC, IFCI, India Cements, Indian Bank, Infibeam Avenues, IRB Infrastructure, Jet Airways, Jain Irrigation, Kaveri Seed, Karnataka Bank, MRPL, NHPC, OBC, PC Jeweller, Repco Home Finance, Reliance Power, South Indian Bank, Suzlon Energy, Syndicate Bank, Wockhardt, Tata Communications, V-Guard Industries etc
Tejas Networks Q4: Adjusted profit at Rs 34 crore versus Rs 4.8 crore, revenue grew to Rs 273.1 crore versus Rs 102.1 crore YoY.
Lux Industries Q4: Profit grew 23.8 percent to Rs 38 crore versus Rs 30.4 crore, revenue increased 15.9 percent to Rs 385.6 crore versus Rs 332.8 crore YoY.
AU Small Finance Bank Q4: Profit jumped 42 percent to Rs 118 crore versus Rs 83 crore, NII grew 34.9 percent to Rs 386.9 crore versus Rs 286.8 crore YoY.
Essel Propack: Blackstone announced the acquisition of 51 percent from promoters of Essel Propack for Rs 134 per share and to make an open offer for 26 percent stake for Rs 139.19 per share.
TCS: Company in pact with India Post to digitise postal services.
GAIL: Company emerged as the highest bidder for wind assets portfolio of IL&FS, offers approximately Rs 4,800 crore for 100 percent of enterprise value for assets
Deepak Fertilizers: Board approved raising of up to $30 million via Foreign Currency Convertible Bonds.
Mcleod Russel: Company announced a sale of three tea estates to Luxmi Tea for Rs 150 crore.
Suven Life Sciences: Company completed the purchase of assets of Rising Pharma through its JV partner.
Seven 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 April 23, Adani Power, DLF, IDBI Bank, Idea Cellular, Jet Airways, PC Jeweller and Reliance Capital are present in this list.