Nagaraj Shetti of HDFC Securities said the short term trend of Nifty is positive, but there is a possibility of weakness emerging from all-time highs.
The hope of an interest rate cut and a rally in auto stocks led the market to start off the month of June on a spectacular note with benchmark indices hitting fresh record highs on June 3. This was despite global growth worries due to ongoing trade war and weak Q4 GDP data.
The BSE Sensex rallied 553.42 points or 1.39 percent to 40,267.62 while the Nifty 50 jumped 165.70 points or 1.39 percent to 12,088.50, forming a strong bullish candle on daily charts.
"Current chart pattern signals a possibility of an upside breakout of a recent upward range movement. Though Nifty moved up sharply on Monday, the overall market breadth was not impressive, as midcap and smallcap segments have shown minor upmove," Nagaraj Shetti – Senior Technical & Derivative Analyst, HDFC Securities told Moneycontrol.
He said the short term trend of Nifty is positive, but there is a possibility of weakness emerging from all-time highs.
The next upside targets to be watched are at 12,150-12,180 levels over coming couple of sessions, he added.
Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said Nifty index has to hold above 12,000-zone to extend its gains towards new lifetime high territory of 12,250 zones while on the downside support is seen at 12,000 and then at 11,880 zones.
The market breadth favoured bears. About 1,405 shares declined against 1,176 advancing shares on the BSE.
The broader markets underperformed frontliners as the Nifty Midcap index was up 0.96 percent and Smallcap index gained 0.28 percent. All sectoral indices closed in green; Auto, FMCG, IT, Pharma and Metal were prominent gainers, rising 1-2 percent.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
Nifty closed at 12,088.55 on June 3. According to the Pivot charts, the key support level is placed at 11,971.4, followed by 11,854.3. If the index starts moving upward, key resistance levels to watch out are 12,154.3 and 12,220.1.
The Nifty Bank index closed at 31,653.65, up 278.25 points on June 3. The important Pivot level, which will act as crucial support for the index, is placed at 31,400.73, followed by 31,147.77. On the upside, key resistance levels are placed at 31,790.63, followed by 31,927.57.
Call options data
Maximum Call open interest (OI) of 18 lakh contracts was seen at the 12,500 strike price. This will act as a crucial resistance level for the June series.
This is followed by 12,000 strike price, which now holds 13.57 lakh contracts in open interest, and 12,400, which has accumulated 13.05 lakh contracts in open interest.
Significant Call writing was seen at the strike price of 12,400 which added 4.47 lakh contracts, followed by 12,300 strike price that added 2.23 lakh contracts and 12,500 strike price that added 0.89 lakh contracts.
Call unwinding was seen at the strike price of 12,000, which shed 0.73 lakh contracts, followed by 11,900 strike which shed 0.35 lakh contracts.
Put options data
Maximum Put open interest of 26.13 lakh contracts was seen at 11,500 strike price. This will act as a crucial support level for the June series.
This was followed by 11,700 strike price, which now holds 15.52 lakh contracts in open interest and 11,800 strike price, which has now accumulated 13.38 lakh contracts in open interest.
Put writing was seen at the strike price of 11,800, which added 3.7 lakh contracts, followed by 12,000 strike price that added 3.36 lakh contracts and 11,500 strike which added 2.75 lakh contracts.
Put unwinding was seen at the strike price of 11,700, which shed 0.48 lakh contracts.
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.
99 stocks saw a long buildup
58 stocks that saw short covering
A decrease in open interest, along with an increase in price, mostly indicates short covering.
22 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.
16 stocks saw long unwinding
FII & DII data
Foreign Institutional Investors (FIIs) bought shares worth net Rs 3,068.88 crore while Domestic Institutional Investors (DIIs) sold Rs 462.69 crore worth of shares in the Indian equity market on June 3, as per provisional data available on the NSE.
Fund Flow Picture
Stocks in news
L&T Technology Services: Promoter L&T to sell up to 4 million shares of company via offer for sale on June 4 and 5, floor price set at Rs 1,650 per share.
GE Power India: Company received order worth Rs 738 crore.
Titan Company: Brickwork Ratings India assigned AAA rating with Stable outlook for proposed cash credit of Rs 1,000 crore and A1+ rating for gold metal loan.
Mahindra & Mahindra: Mahindra Susten and Mitsui to co-invest in distributed solar power projects in India.
TCS: Company launched MasterCraft TransformPlus v4.0 with new cognitive features for analysis and modernization of enterprise applications.
Dr Reddy's Labs: Company re-launched Zenatane (lsotretinoin capsules, USP), 10 mg, 20 mg, 30 mg and 40 mg in the US market.
Wipro: Company has fixed June 21 as the record date for the purpose of determining the entitlement and the names of equity shareholders who are eligible to participate in the buyback.
Orchid Pharma Q4: Loss at Rs 13.44 crore versus loss Rs 92.37 crore; revenue rises to Rs 162 crore versus Rs 155.8 crore YoY.
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Analyst or Board Meet/Briefings
Voltas: Company's officials will meet Edelweiss Financial Services Ltd on June 4 and will attend UBS India Mid-Cap Conference 2019 on June 6.
Tech Mahindra: Investor interactions to be held on June 4.
Titagarh Wagons: Company will hold Conference Call to discuss its Q4FY19 financial performance, to be organised by B&K Securities on June 4.
Royal Orchid Hotels: Company's officials will interact with analysts on June 11.
Kajaria Ceramics: Company would be attending 'India Mid-Cap Conference 2019' at Mumbai, being organised by UBS Securities India on June 7.
KP Energy: Conference call to discuss the financial performance is scheduled on June 5.
TCI Express: Company's officials will meet institutional investors/analysts on June 5 and 6.
Cummins India: Company will hold a conference call with ICICI Securities, IDFC Mutual Fund, Daiwa Capital and Fidelity Internationa on June 4.
Setco Automotive: Company has scheduled a Conference Call for analysts, fund houses, investors on June 4.
Speciality Papers: Board meeting is scheduled for June 6 to consider the resignation of Nemchand Gala, Managing Director of the company.
No stock under F&O ban period on NSE
For June 4, not a single stock is under a ban period.Securities in ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.
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