It was a good start to the week as the market closed higher, continuing the uptrend for the second consecutive session on May 22, driven largely by technology and metal stocks. Pharma, oil & gas and select FMCG stocks also aided the uptrend.
The BSE Sensex climbed 234 points to 61.964, while the Nifty50 rose 111 points to 18,314 and formed a bullish candlestick pattern on the daily timeframe, negating lower highs and lower lows formation of previous four straight sessions.
"Zooming into 15 minutes chart, we observe that Nifty has reversed its recent short-term downtrend. The reversal was confirmed when the Nifty took out the previous swing high of 18,186 last Friday. Further upsides are now likely once the immediate resistance of 18,335 is taken out. Crucial support is now at 18,178," Subash Gangandharan, Senior Technical and Derivative Analyst at HDFC Securities said.
On the daily chart, he observes that Nifty found support near the 20-day SMA (simple moving average) and has bounced back in the last two sessions, indicating the uptrend looks set to continue.
"Immediate upside target for the Nifty is at 18,459 once the immediate resistance of 18,335 is taken out," Subash said.
The broader markets also joined bulls as the Nifty Midcap 100 and Smallcap 100 indices gained six-tenth of a percent respectively, but the overall market breadth was equal.
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 the current month.
Key support, resistance levels on Nifty
Pivot charts indicate that the Nifty may get support at 18,216, followed by 18,179 and 18,120. If the index advances, 18,336 would be the key resistance level to watch out for followed by 18,373 and 18,433.
The Bank Nifty, however, underperformed broader markets, falling 84 points to 43,885 and forming small bodied bearish candlestick pattern with a long lower shadow and small upper shadow on the daily charts.
The Bank Nifty has been consolidating near its all-time high. "It has managed to sustain its position above important moving averages, indicating strength in the trend. Despite this, the Relative Strength Index (RSI) is currently displaying a bearish crossover, suggesting weak momentum," Rupak De Senior Technical analyst at LKP Securities said.
In the short term, he feels the Bank Nifty may continue to consolidate in a narrow range of 43,500-44,000. The support levels to watch are at 43,700 and 43,500, while the resistance level stands at 44,000-44,200, he said.
As per the pivot point calculator, the Bank Nifty may take support at 43,735, followed by 43,654 and 43,524. The key resistance levels are 43,996, 44,077 and 44,208.
On the monthly options front, the maximum call open interest (OI) was at 18,500 strike, with 1.03 crore contracts, which is expected to be a crucial resistance level for the Nifty.
This was followed by 18,300 strike comprising 78.63 lakh contracts and 18,400 strike with more than 77.08 lakh contracts.
Call writing was seen at 18,500 strike, which added 24.42 lakh contracts, followed by 18,600 strike, which added 11.28 lakh contracts, and 18,900 strike, which added 9.21 lakh contracts.
Call unwinding was at 18,200 strike, which shed 22.92 lakh contracts, followed by 18,100 strike, which shed 8.59 lakh contracts, and 19,100 strike, which shed 5.41 lakh contracts.
The maximum put open interest was at 18,200 strike, with 1.27 crore contracts, which is expected to be an important support in the coming sessions.
This was followed by the 18,000 strike, comprising 1.13 crore contracts, and 18,100 strike with 79.16 lakh contracts.
Put writing was seen at 18,200 strike, which added 46.63 lakh contracts, followed by 18,300 strike, which added 41.84 lakh contracts, and 18,000 strike, which added 36.4 lakh contracts.
Put unwinding was seen at 17,500 strike, which shed 7.25 lakh contracts, followed by 19,000 strike, which shed 60,700 contracts, and 18,800 strike, which shed 3,200 contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. The highest delivery was seen in United Breweries, Dabur India, Federal Bank, ITC and Godrej Consumer Products among others.
An increase in open interest (OI) and price typically indicates a build-up of long positions. Based on the OI percentage, 65 stocks, including Dixon Technologies, Balkrishna Industries, Muthoot Finance, Cummins India and Crompton Greaves Consumer Electricals saw long build-ups.
A decline in OI and price generally indicates a long unwinding. Based on the OI percentage, 21 stocks, including Whirlpool, Polycab India, Federal Bank, BHEL and Manappuram Finance saw long unwinding.
32 stocks see a short build-up
An increase in OI along with a price decrease indicates a build-up of short positions. Based on the OI percentage, 32 stocks, including MCX India, Siemens, Glenmark Pharma, Tata Communications and JK Cement saw a short build-up.
A decrease in OI along with a price increase is an indication of short-covering. Based on the OI percentage, 71 stocks were on the short-covering list. These included IRCTC, Abbott India, Aarti Industries, Divis Laboratories and Balrampur Chini Mills.
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Stocks in the news
Shree Cement: The cement major has recorded a 15.3 percent year-on-year decline in standalone profit at Rs 546.2 crore for the March FY23 quarter, impacted by a sharp increase in power and fuel cost. The standalone revenue for the quarter grew by 16.7 percent to Rs 4,785 crore compared to the year-ago period. Profit and topline were above analysts' estimates, but operating numbers missed expectations.
PB Fintech: The Policybazaar and Paisabazaar operator has reduced its PAT loss significantly to Rs 8.9 crore for the quarter ended March FY23, from Rs 219.6 crore in the same period last year. The operating revenue grew by 61 percent to Rs 869 crore compared to the corresponding period last fiscal. The insurance premium at Rs 3,586 crore for the March FY23 quarter increased by 65 percent and credit disbursal at Rs 3,357 crore grew by 53 percent over a year-ago period.
Torrent Power: The stock will be in focus as the board of directors of the company will meet on May 29 to consider raising funds via the issuance of non-convertible debentures up to Rs 3,000 crore through a private placement basis. The board will also consider financial results for the quarter and year ended March 2023, and recommendation of final dividend, if any, for FY23.
ITI: The multi-technology public sector firm has bagged an advance purchase order (APO) from BSNL worth Rs 3,889 crore for its 4G rollout. The scope of work includes planning, engineering, supply, installation & commissioning and AMC of the 4G mobile network for 23,633 sites in the west zone of the BSNL network.
Astra Microwave Products: Astra Rafael Comsys, the joint venture company, has bagged Rs 158 crore worth of orders from defence public sector undertaking (DPSU) for the supply of software-defined radio (SDR).
JSW Steel: The company and Japan-based JFE Steel agreed to establish a cold rolled grain-oriented electrical steel (CRGO) manufacturing joint venture in India. The 50:50 joint venture company will be able to manufacture the entire range of CRGO products at its proposed facilities at Vijayanagar in Karnataka. The resolution plan submitted by its subsidiary JSW Steel Coated Products for National Steel & Agro Industries has been approved by NCLT.
HEG: The graphite electrode manufacturer has registered a 23 percent year-on-year decline in consolidated profit at Rs 99.72 crore for the March FY23 quarter, impacted by lower topline and operating numbers. Revenue from operations for the quarter at Rs 616.88 crore fell by 8.3 percent compared to the corresponding period last fiscal. The company announced a final dividend of Rs 42.50 per share. HEG board has approved further investment of up to Rs 90 crore in one or more tranches, in its subsidiary TACC.
Foreign institutional investors (FIIs) bought shares worth Rs 922.89 crore, while domestic institutional investors (DIIs) purchased shares worth Rs 604.57 crore on May 22, provisional data from the National Stock Exchange showed.
Stocks under F&O ban on NSE
The National Stock Exchange has added Indiabulls Housing Finance, and retained L&T Finance Holdings and Manappuram Finance to its F&O ban list for May 23. Securities in the 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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