Technically, the market is expected to be in control of bears in the short term. The Nifty50 may try to take support at the 21,500 mark, and if the said level is broken then the selling pressure may extend up to the 21,300 zone, said experts. While the hurdle for the index may be seen at 21,800-21,850 on the higher side as breaking the same can drive the index towards the 22,000 mark, they said, adding that overall, it is a part of consolidation which generally takes place after a one-way rally.
On January 2, the BSE Sensex was down 380 points at 71,893, while the Nifty50 fell 76 points to 21,666 and formed a bearish candlestick pattern with a long lower shadow on the daily charts indicating some buying interest at lower levels.
The smaller range movement of the last 3-4 sessions has been broken on the lower side. Technically, "this pattern indicates a short-term reversal pattern. Such minor weaknesses post range movements in the recent past have turned out to be a buy on dips opportunity," Nagaraj Shetti, senior technical research analyst at HDFC Securities said.
Positive chart patterns like higher tops and bottoms are intact on the daily chart and present consolidation/weakness is in line with the formation of new higher bottom of the sequence. The bottom reversal needs to be confirmed at the lows, he said.
Shetti feels a slide below the immediate support of 21,500 could open some more weakness for the near term. A sustainable move above 21,840 could bring bulls back into the action, he said.
Ruchit Jain, lead research at 5paisa.com advised traders to trade with a stock-specific approach for a while and look for buying opportunities in stocks which are showing relative outperformance to the benchmark.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance levels on the Nifty
The pivot point calculator indicates that the Nifty is likely to see immediate resistance at 21,684 followed by 21,783 and 21,859 levels, while on the lower side, it can take support at 21,583 followed by 21,535 and 21,459 levels.
On January 2, the Bank Nifty continued lower highs and lower lows formation and corrected for the third consecutive session. The banking index has decisively broken the 48,000 mark and fell 473 points to close at 47,762.
"It is approaching the crucial support of 47,630 where the 20-day moving average is placed," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
He expects the Bank Nifty to hold on to this support and consolidate before resuming the next leg of the up move. Overall, the structure is still in favour of the bulls, he feels.
As per the pivot point calculator, the Bank Nifty is expected to see resistance at 47,711 followed by 48,188 and 48,392 levels, while on the lower side, it may take support at 47,654 followed by 47,528 and 47,325 levels.
According to the weekly options data, the 21,800 strike owned the maximum Call open interest with one crore contracts, which can act as a key resistance level for the Nifty in the short term. It was followed by the 21,700 strike, which had 91.59 lakh contracts, while the 22,000 strike had 90.84 lakh contracts.
Meaningful Call writing was seen at the 21,700 strike, which added 50.43 lakh contracts followed by 21,800 and 21,600 strikes, which added 40.19 lakh and 22.85 lakh contracts, respectively.
The maximum Call unwinding was at the 22,400 strike, which shed 20.64 lakh contracts followed by 22,800 and 22,100 strikes, which shed 2.76 lakh and 1.87 lakh contracts.
On the Put front, the maximum open interest was seen at 21,000 strike, which can act as a key support area for the Nifty with 77.75 lakh contracts. It was followed by 21,500 strike comprising 64.03 lakh contracts and then 21,600 strike with 59.42 lakh contracts.
Meaningful Put writing was at 21,000 strike, which added 10.81 lakh contracts followed by 21,500 strike and 21,300 strike, which added 9 lakh contracts and 8.92 lakh contracts, respectively.
The Put unwinding was seen at 21,700 strike, which shed 22.74 lakh contracts, followed by 21,800 strike, which shed 18.47 lakh contracts and then at 20,600 strike, which shed 4.39 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. Bharti Airtel, Balkrishna Industries, Godrej Consumer Products, Maruti Suzuki and Infosys saw the highest delivery among the F&O stocks.
A long build-up was seen in 57 stocks, which included Delta Corp, Abbott India, Tata Consumer Products, Dr Reddy's Laboratories and Divis Laboratories. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, 30 stocks saw long unwinding, including Dixon Technologies, Balrampur Chini Mills, LIC Housing Finance, Shree Cement and IndiaMART InterMESH. A decline in OI and price indicates long unwinding.
74 stocks see a short build-up
A short build-up was seen in 74 stocks including Bata India, Eicher Motors, Indian Energy Exchange, AU Small Finance Bank and Ashok Leyland. An increase in OI along with a fall in price points to a build-up of short positions.
Based on the OI percentage, 26 stocks were on the short-covering list. This included ACC, Syngene International, Siemens, Bajaj Finance and Aarti Industries. A decrease in OI along with a price increase is an indication of short-covering.
The Nifty Put Call ratio (PCR), which indicates the mood of the equity market, fell below the 1 mark, to 0.92 on January 2, from 1.14 levels in the previous session. The below 1 PCR indicates that the traders are buying more Calls options than Puts, which generally indicates an increase in bullish sentiment.
Amansa Holding picked Rs 119.87 crore shares in Strides Pharma Science, while Radhakishan Shivkishan Damani bought a 1.4 percent stake in VST Industries via open market transactions.
For more bulk deals, click here
Stocks in the news
Avenue Supermarts: The D-Mart chain operator has clocked 17.2 percent on-year growth in standalone revenue from operations at Rs 13,247.33 crore for the quarter ended December FY24. The total number of stores as of December 2023 stood at 341.
Hero MotoCorp: The world's largest two-wheeler maker has sold 3,93,952 units of motorcycles and scooters in December 2023, down 0.05 percent compared to 3,94,179 units dispatched in the year-ago month. Domestic sales fell 0.92 percent YoY to 3,77,842 units but exports jumped 25.7 percent to 16,110 units during the same period.
Bank of Maharashtra: The public sector lender has recorded an 18.92 percent on-year growth in total business at Rs 4.34 lakh crore for the quarter ended December FY24, with deposits increasing by 17.9 percent to Rs 2.46 lakh crore and gross advances rising 20.3 percent to Rs 1.89 lakh crore.
Birlasoft: Manjunath Kygonahally has been appointed as the Chief Executive Officer (CEO) for the Rest of the World (ROW) region and senior management personnel of the company with effect from January 2.
Hindustan Zinc: The mined metal production at 2,71,000 tonnes grew by 7 percent YoY and 8 percent QoQ, driven by a mix of improved mined metal grades and higher ore production at Rampura Agucha & Sindesar Khurd Mine.
Rail Vikas Nigam: The joint venture - KRDCL-RVNL - has received a Letter of Acceptance for the major upgradation/redevelopment of Varkala Sivagiri railway station. The project cost is Rs 123.36 crore.
Coal India: Coal India supplied an all-time high volume of 98 million tonnes (mts) to non-regulated sector (NRS) consumers till December FY24. This converts to a whopping 23 million tonnes increase with 31 percent growth over 75 million tonnes of the same period last fiscal.
Funds Flow (Rs crore)
Foreign institutional investors (FIIs) bought shares worth Rs 1,602.16 crore, while domestic institutional investors (DIIs) sold Rs 1,959.04 crore worth of stocks on January 2, provisional data from the NSE showed.
Stock under F&O ban on NSE
The NSE has added Delta Corp, Indian Energy Exchange, SAIL and Zee Entertainment Enterprises to its F&O ban list for January 3, while retaining Balrampur Chini Mills and Hindustan Copper to the said list.
Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.
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