The market fell sharply by 1 percent on June 7, after consolidation in the previous two sessions, as traders seem to be cautious ahead of the interest rate decision by Monetary Policy Committee and commentary by the Reserve Bank of India. All sectors, barring oil and gas and auto, closed in the red.
The BSE Sensex plunged 568 points or 1.02 percent to 55,107, while the Nifty50 declined 153 points or 0.92 percent to 16,416 and formed a bearish candle on the daily charts.
"A small negative candle was formed on the daily chart with a minor lower shadow. Technically, this pattern signals a weak trend with rangebound action. The Nifty is currently placed at the edge of breaking below the crucial support of 16,400 levels (support as per change in polarity and daily 10 and 20 day EMA). But minor buying is still emerging from the lows," Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.
He pointed out that the market is waiting for the trigger from the RBI's mid-quarter policy review meet, which is expected to decide on monetary policy on June 8. The negative outcome could trigger more weakness and any positive or status quo approach could bring bulls back into action, Shetti added.
The positive sequence like higher tops and bottoms is intact as per the daily chart. The present weakness is expected to form a new higher bottom of the sequence. Hence, the market action in the next 1-2 sessions could decide the course of action, the market expert said.
The broader markets also corrected with the Nifty Midcap 100 and Smallcap 100 indices falling around 0.6 percent each, while the India VIX, the fear index, remained above the crucial 20 mark, up by 1.1 percent to 20.43 levels.
We have collated 15 data points to help you spot profitable trades:
Note: The open interest (OI) and volume data of stocks given in this story are the aggregates of three-month data and not of the current month only.
Key support and resistance levels on the Nifty
As per the pivot charts, the key support level for the Nifty is placed at 16,347, followed by 16,277. If the index moves up, the key resistance levels to watch out for are 16,487 and 16,557.
Nifty Bank declined 314 points to close at 34,996 on Tuesday. The important pivot level, which will act as crucial support for the index, is placed at 34,836, followed by 34,675. On the upside, key resistance levels are placed at 35,155 and 35,315 levels.
Maximum Call open interest of 23.22 lakh contracts was seen at 17,000 strike, which will act as a crucial resistance level in the June series.
This is followed by 17,500 strike, which holds 21.77 lakh contracts, and 18,000 strike, which has accumulated 17.5 lakh contracts.
Call writing was seen at 16,400 strike, which added 3.51 lakh contracts, followed by 17,000 strike which added 1.59 lakh contracts and 16,500 strike which added 1.26 lakh contracts.
Call unwinding was seen at 17,500 strike, which shed 1.43 lakh contracts, followed by 17,200 strike which shed 76,900 contracts and 16,600 strike which shed 57,200 contracts.
Maximum Put open interest of 39.6 lakh contracts was seen at 16,000 strike, which will act as a crucial support level in the June series.
This is followed by 15,500 strike, which holds 32.12 lakh contracts, and 16,500 strike, which has accumulated 24.48 lakh contracts.
Put writing was seen at 16,400 strike, which added 3.49 lakh contracts, followed by 15,500 strike, which added 1.39 lakh contracts and 16,300 strike which added 1.38 lakh contracts.
Put unwinding was seen at 16,600 strike, which shed 1.82 lakh contracts, followed by 16,700 strike which shed 50,900 contracts, and 17,000 strike which shed 50,450 contracts.
Stocks with a high delivery percentage
A high delivery percentage suggests that investors are showing interest in these stocks. The highest delivery was seen in Power Grid Corporation of India, Godrej Consumer Products, HDFC Bank, Bharti Airtel, and TCS, among others.
An increase in open interest, along with an increase in price, mostly indicates a build-up of long positions. Based on the open interest future percentage, here are the top 10 stocks including Hindustan Aeronautics, Petronet LNG, IOC, Coal India, and GAIL India, in which a long build-up was seen.
A decline in open interest, along with a decrease in price, mostly indicates a long unwinding. Based on the open interest future percentage, here are the top 10 stocks including Tata Communications, LIC Housing Finance, AU Small Finance Bank, Apollo Tyres, and Balkrishna Industries, in which long unwinding was seen.
An increase in open interest, along with a decrease in price, mostly indicates a build-up of short positions. Based on the open interest future percentage, here are the top 10 stocks including Nifty Financial, Dalmia Bharat, Delta Corp, Gujarat Gas, and ACC, in which a short build-up was seen.
30 stocks witnessed short-covering
A decrease in open interest, along with an increase in price, mostly indicates a short-covering. Based on the open interest future percentage, here are the top 10 stocks including Honeywell Automation, Indian Hotels, Bajaj Auto, Bharat Forge, and Escorts, in which short-covering was seen.
Fiem Industries: SAIF India IV FII Holdings sold 1.6 lakh equity shares in the company via open market transactions on June 7. These shares were sold at an average price of Rs 1,038.23 per share.
PB Fintech: Founder, chairman and CEO Yashish Dahiya sold 37,69,471 equity shares in the company via open market transactions on June 7. These shares were sold at an average price of Rs 610.24 per share.
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Investors Meetings on June 8
Tata Steel, Metropolis Healthcare, Sona BLW Precision Forgings, and Dr Lal PathLabs: Officials of these companies will participate in Morgan Stanley Virtual India Summit 2022.
Larsen & Toubro: The company's officials will attend Nomura Investment Forum Asia 2022.
Sun Pharma: The company's officials will attend Citigroup Pan Asia Regional Investor Conference.
Mahindra & Mahindra: The company's officials will attend Citi Virtual Investor Conference.
Route Mobile, Crompton Greaves Consumer Electricals, Zee Entertainment Enterprises, and V-Mart Retail: Officials of these companies will participate in Edelweiss India Conference.
Tata Chemicals: The company's officials will meet Antique Stock Broking.
KEI Industries, UltraTech Cement, Hindalco Industries, Asian Paints, and Varun Beverages: Officials of these companies will participate in Jefferies India Forum Investor Conference 2022.
Nuvoco Vistas Corporation: The company's officials will meet Dolat Capital, and Quantum Mutual Fund.
Craftsman Automation, Deepak Fertilisers, Quess Corp, Mahindra Lifespace Developers, Meghmani Organics: Officials of these companies will participate in Motilal Oswal Annual India Ideation Conference.
Godrej Properties: The company's officials will meet Sands Capital Management, Newton Investment Management, and BlackRock Asset Management (North Asia).
Puravankara: The company's officials will meet LIC Mutual Fund.
Stocks in News
Rate sensitive stocks: Rate sensitive stocks including banks, financial services, auto, and realty will be in focus on June 8 ahead of the interest rate decision by Monetary Policy Committee. Experts largely expect a 40-50 basis points hike in repo rate, while the commentary by the Reserve Bank of India will also be closely watched by the Street.
Hindustan Copper: The company resumed mining operations at the Surda mine in Ghatshila, Jharkhand on June 7. The resumption of operations is after the renewal of the lease by the Government of Jharkhand and obtaining the required Environment Clearance from the Ministry of Environment.
Wockhardt: The pharma company has appointed Deepak Madnani as the Chief Financial Officer with immediate effect on June 7. The company has taken this decision after Pramod Gupta has conveyed that on account of his health reasons he will not be able to continue as the Chief Financial Officer.
Zee Entertainment Enterprises: Life Insurance Corporation of India bought additional two lakh equity shares in the company via open market transactions on June 6. With this, LIC's stake in the company stands increased to 5.008 percent, up from 4.988 percent earlier.
Sharika Enterprises: The company has received a purchase order from Voith Hydro Private Limited. The company will supply 220KV XLPE cable package for Voith Hydro Naitwar Mori project for a total value of Rs 4.6 crore.
RITES: The transport infrastructure consultancy and engineering company signed a memorandum of understanding (MoU) with Grands Trains
DU Senegal (GTS-S.A), a railroad company of Senegal, for technical cooperation in the railway sector including rail transportation, supply of rolling stock, railway infrastructure development, modernization of workshops, IT solutions for railway operations, and upgradation of signalling, telecommunication, and rail monitoring systems.
Cineline India: The company informed exchanges that the board of directors approved the issuance of up to 27 lakh warrants for Rs 35.10 crore to promoters by way of a preferential issue. These warrants are convertible into equity shares within 18 months at a price of Rs 130 per share. The company will also monetise property - Eternity Mall, at Nagpur for Rs 60 crore.
Fund Flow
Foreign institutional investors (FIIs) have net sold Rs 2,293.98 crore worth of shares, whereas domestic institutional investors (DIIs) remained net buyers, to the tune of Rs 1,311.14 crore worth of shares on June 7, as per provisional data available on the NSE.
Stocks under F&O ban on NSE
One stock - Delta Corp - is under the NSE F&O ban for June 8. 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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