The market reversed some of the previous day's gains and closed with half a percent losses on February 6 as traders turned cautious ahead of the outcome of the Monetary Policy Committee meeting scheduled for February 8. Weak cues from global peers also weighed on sentiment.
The BSE Sensex fell 335 points to 60,507, while the Nifty50 declined 89 points to 17,765 amid volatility and formed inside bar and bearish candlestick pattern with longer lower shadow on daily charts. This indicates buying interest on declines, but there was a higher low formation.
"On the daily chart, the index has been making lower tops, suggesting a waning bullishness. However, the bulls could protect the support of 17,650," Rupak De, Senior Technical Analyst at LKP Securities said.
Going forward, he says the trend may remain sideways. On the lower end, supports are placed at 17,650-17,400, whereas on the higher end, 17,950-18,000 may act as a crucial resistance, the market expert said.
The broader markets moved in the opposite direction as the Nifty Midcap 100 index gained nearly 1 percent and Smallcap 100 index was up half a percent.
We have collated 15 data points to help you spot profitable trades:
Note: The open interest (OI) and volume data of stocks in this article are the aggregates of three-month data, and not just of the current month.
Key support and resistance levels on the Nifty
As per the pivot charts, we have the key support level for the Nifty at 17,714, followed by 17,685, and 17,637. If the index moves up, the key resistance levels to watch out for are 17,810, followed by 17,840 and 17,888.
The Nifty Bank was also under pressure, falling 125 points to 41,375 and forming a bearish candle with a long upper shadow on the daily charts, making higher high higher low for the second consecutive session. Unless and until the index breaks a big range of 39,500-42,000 (formed on February 1) on either side, the volatility is likely to continue, experts said.
The important pivot level, which will act as crucial support for the index, is placed at 41,276, followed by 41,167, and 40,990. On the upside, key resistance levels are placed at 41,630, followed by 41,740, and 41,917.
On a weekly basis, we have seen the maximum Call open interest (OI) at 18,000 strike, with 89.67 lakh contracts, which may be a crucial resistance level in coming sessions.
This is followed by an 18,500 strike, comprising 75.85 lakh contracts, and a 17,800 strike, where we have more than 53.74 lakh contracts.
Call writing was seen at 17,800 strike, which added 30.96 lakh contracts, followed by 18,000 strike, which added 30.6 lakh contracts, and 17,900 strike, which added 26.12 lakh contracts.
We have seen Call unwinding in 17,600 strike, which shed 6.84 lakh contracts, followed by 18,800 strike, which shed 2.92 lakh contracts, and 18,900 strike, which shed 91,700 contracts.
On a weekly basis, the maximum Put OI was seen at 17,000 strike, with 60.66 lakh contracts, which can be a crucial support level for coming sessions.
This is followed by the 17,600 strike, comprising 56.35 lakh contracts, and the 17,500 strike, where we have 50.3 lakh contracts.
Put writing was seen at 17,000 strike, which added 13.1 lakh contracts, followed by 17,100 strike, which added 12.29 lakh contracts, and 17,800 strike which added 6.55 lakh contracts.
Put unwinding was seen at 16,900 strike, which shed 9.14 lakh contracts, followed by 17,600 strike, which shed 7.6 lakh contracts, and 16,800 strike, which shed 5.15 lakh contracts.
Stocks with a high delivery percentage
A high delivery percentage suggests that investors are showing interest in these stocks. We have seen the highest delivery in NTPC, Bata India, PVR, Hindustan Unilever, and UltraTech Cement, among others.
An increase in open interest (OI), along with an increase in price, mostly indicates a build-up of long positions. Based on the OI percentage, we have seen a long build-up in 72 stocks including Navin Fluorine International, Alkem Laboratories, City Union Bank, Zydus Life Sciences, and Info Edge India.
A decline in OI, along with a decrease in price, mostly indicates long unwinding. Based on the OI percentage, 22 stocks saw long unwinding, including Manappuram Finance, Shree Cements, Titan Company, State Bank of India, and Axis Bank.
An increase in OI, along with a decrease in price, mostly indicates a build-up of short positions. Based on the OI percentage, we have seen a short build-up in 48 stocks including InterGlobe Aviation, Escorts, Divis Laboratories, Tata Steel, and LIC Housing Finance.
50 stocks witnessed short-covering
A decrease in OI, along with an increase in price, mostly indicates a short-covering. Based on the OI percentage, as many as 50 stocks were on the short-covering list, including Adani Ports and Special Economic Zone, Crompton Greaves Consumer Electricals, HDFC AMC, Aarti Industries, and Birlasoft.
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Bharti Airtel, Hero MotoCorp, Ambuja Cements, Adani Ports and Special Economic Zone, Adani Green Energy, NDTV, Aditya Birla Fashion and Retail, Astral, Barbeque-Nation Hospitality, Bharat Dynamics, Computer Age Management Services, Deepak Nitrite, Gujarat Fluorochemicals, GSK Pharma, Kalyan Jewellers India, Motherson Sumi Wiring India, Navin Fluorine International, NHPC, Phoenix Mills, Ramco Cements, Rashtriya Chemicals & Fertilizers, Sobha, Thermax, and Wonderla Holidays will be in focus on January 7 ahead of quarterly earnings.
Stocks in the news
Tata Steel: The Tata Group company has posted a consolidated loss of Rs 2,502 crore for the quarter ended December FY23, against a profit of Rs 9,598 crore in the year-ago period, impacted by a sharp drop in realisations and spreads in Europe. Revenue for the quarter fell 6.1 percent YoY to Rs 57,083.6 crore with a fall in India as well as Europe businesses. On the operating front, EBITDA plunged 74.5 percent YoY to Rs 4,048 crore and the margin dropped 1,906 bps to 7.09 percent for the quarter. Overall numbers, barring topline, missed analysts' estimates.
LIC Housing Finance: The housing finance company has recorded a profit of Rs 480 crore for the quarter ended December FY23, down by 37.4 percent compared to the year-ago period, impacted by impairment on financial instruments. Net interest income grew by 10.4 percent year-on-year to Rs 1,605.9 crore for the quarter.
Muthoot Finance: The gold loan financing company has registered a 12.4 percent year-on-year decline in standalone profit at Rs 902 crore for the three-month period ended December FY23 despite a fall in impairment on financial instruments, as net interest income fell nearly 10 percent to Rs 1,704 crore compared to the year-ago period.
JK Paper: The paper manufacturer has recorded a 119 percent year-on-year increase in consolidated profit at Rs 329.3 crore for the three-month period ended December FY23, as revenue grew by 60.5 percent YoY to Rs 1,643 crore for the quarter. On the operating front, EBITDA surged 125 percent YoY to Rs 565.5 crore and the margin expanded by 985 bps to 34.4 percent in Q3FY23.
UltraTech Cement: The cement major has announced the commissioning of a 1.5 mpta brownfield cement grinding unit at Jharsuguda in Odisha, taking the total cement capacity in Odisha to 4.1mtpa. With this commissioning, the company's total cement manufacturing capacity in India now stands at 122.85 mtpa.
Grasim Industries: The board members of the company have given their approval for the appointment of Ananyashree Birla and Aryaman Vikram Birla as additional directors (non-executive directors). Yazdi Piroj Dandiwala is also appointed as an additional director (independent director).
BLS International Services: The company has reported robust earnings for the quarter ended December FY23 with profit growing 62 percent year-on-year to 45.85 crore on strong operating performance. Revenue for the quarter grew by 93 percent YoY to Rs 438 crore led by a sharp recovery in visa and consular business, and an increase in revenue from ZMPL. On the operating front, EBITDA at Rs 66.3 crore increased by 160 percent YoY in Q3FY23 with the margin rising 390 bps to 15.1 percent on improvement in operational efficiencies.
Foreign institutional investors (FII) sold shares worth Rs 1,218.14 crore, while domestic institutional investors (DII) purchased shares worth Rs 1,203.09 crore on February 6, as per provisional data available on the NSE.
Stocks under F&O ban on NSE
The National Stock Exchange has retained Adani Ports on its F&O ban list for February 7. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95 percent of the market-wide position limit.
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