Shabbir Kayyumi of Narnolia Financial Advisors said Nifty's close below the strong support (10,640) will push prices lower towards 10,580 levels.
The market closed the session on a flat note after witnessing consolidation on January 29 as traders remained cautious ahead of the Interim Budget and F&O expiry later this week. The losses led by banking & financials and auto stocks were offset by the rally in FMCG, IT and pharma stocks.
The 30-share BSE Sensex was down 64.20 points at 35,592.50 while the Nifty 50 fell 9.30 points to 10,652.20 and formed 'Long Legged Doji' kind of pattern on the daily scale.
"The internal structure i.e. the hourly chart shows that the Nifty has formed an Impulse on the downside from 10,931 to 10,583 & is now undergoing a retracement," Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas told Moneycontrol.
As per a higher time frame, he said the bounce can be labelled as a fourth wave pullback and is soon to be followed by another leg on the downside. "Thus sell on rise would be the strategy going ahead."
On the higher side, 10,720-10,750 shall be the key area where one can look to initiate a fresh sell position, he said, adding overall trend for the Nifty continues to be down.
The typical long-legged Doji pattern is formed when the opening price is almost equal to the closing price but there was a lot of intraday movement on either side.
Nifty took support from the previous swing low and lower Bollinger band placed around 10,580 levels.
"Sustained trade above today’s high (10,690) will resume the upmove taking the index higher towards immediate resistance zone of 50 DMA & 100 DMA placed around 10,780 levels. Moreover, a close below the strong support (10,640) will push prices lower towards 10,580 levels," Shabbir Kayyumi, Head of Technical Research at Narnolia Financial Advisors said.
The broader markets outperformed benchmark indices as the Nifty Midcap index rose 0.3 percent and Smallcap index was up 0.2 percent.
India VIX fell by 2.5 percent to 18.42 levels but overall higher volatility is keeping the volatile swing in the market with restricted upside.
We have collated top 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
The Nifty closed at 10,652.2 on January 29. According to Pivot charts, the key support level is placed at 10,593.83, followed by 10,535.47. If the index starts moving upward, key resistance levels to watch out are 10,700.43 and then 10,748.67.
The Nifty Bank index closed at 26,573.40, down 79.65 points on January 29. The important Pivot level, which will act as crucial support for the index, is placed at 26,428.73, followed by 26,284.06. On the upside, key resistance levels are placed at 26,730.93, followed by 26,888.47.
Call Options Data
Maximum Call open interest (OI) of 44.52 lakh contracts was seen at the 11,000 strike price. This will act as a crucial resistance level for the January series.
This was followed by the 10,900 strike price, which now holds 38.33 lakh contracts in open interest, and 10,800, which has accumulated 36.33 lakh contracts in open interest.
Meaningful Call writing was seen at 10,600, which added 4.34 lakh contracts, followed by 10,700 strike which added 4.25 lakh contracts and 10,800 strike which added 0.83 lakh contracts.
Call unwinding was seen at 10,900 strike, which shed 9.85 lakh contracts, followed by 11,000 strike which shed 5.72 lakh contracts and 11,100 strike which shed 2.55 lakh contracts.
Put Options data
Maximum Put open interest of 27.01 lakh contracts was seen at the 10,500 strike price. This will act as a crucial support level for the January series.
This was followed by the 10,600 strike price, which now holds 24.95 lakh contracts in open interest, and the 10,700 strike price, which has now accumulated 24.71 lakh contracts in open interest.
There was hardly any Put writing seen.
Put unwinding was seen at the strike price of 10,800, which shed 6.3 lakh contracts, followed by 10,900, which shed 5.04 lakh contracts and 10,400, which shed 2.3 lakh contracts.
FII & DII data
Foreign Institutional Investors (FIIs) sold shares worth Rs 354.36 crore while Domestic Institutional Investors bought Rs 81.27 crore worth of shares in the Indian equity market on January 29, as per provisional data available on the NSE.
Fund Flow Picture
Stocks with high delivery percentage
High delivery percentage suggests that investors are accepting delivery of the stock, which means that investors are bullish on it.
59 stocks saw a long buildup
70 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
58 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.
12 stocks saw long unwinding
Bulk Deals on January 29
Persistent Systems: Saif India IV FII Holdings Limited sold 6,83,000 shares of the company at Rs 580.07 per share on the NSE and 4,67,000 shares at Rs 580 per share on the BSE.
Suumaya Lifestyle: A G Shares & Securities sold 1,28,000 shares of the company at Rs 22.52 per share on the NSE.
(For more bulk deals, click here)
Analyst or Board Meet/Briefings
UCO Bank: Extraordinary General Meeting of the shareholders of the bank is scheduled to be held on February 20, 2019.
KEI Industries: Conference call will be organised by Edelweiss Securities Limited on February 5.
Graphite India: Company will announce its October-December quarter earnings on February 6.
Mangalam Drugs & Organics : Company will announce its October-December quarter earnings on February 11.
Siemens: Company will announce its October-December quarter earnings on February 6.
S H Kelkar: Company will announce its October-December quarter earnings on February 6.
Siemens: Company's officials will be meeting HDFC Asset Management Company on January 30.
Avanti Feeds: Company will announce its October-December quarter earnings on February 8.
Symphony: Company will announce its October-December quarter earnings on February 5.
Sakthi Sugars: Company will announce its October-December quarter earnings on February 14.
Balkrishna Industries: Company will announce its October-December quarter earnings on February 8.
Mirc Electronics: Company will announce its October-December quarter earnings on February 12.
Dish TV: Company will announce its October-December quarter earnings on February 5.
VST Tillers Tractors: Company will announce its October-December quarter earnings on February 8.
8K Miles Software Services: Company will announce its October-December quarter earnings on February 13.
Indo Count Industries: Company will announce its October-December quarter earnings on February 8.
Suven Life Sciences: Company will announce its October-December quarter earnings on February 5.
Pfizer: Company's officials will be meeting Batlivala & Karani Securities India Private Limited and its clients on January 30.
Future Retail: Board meeting would also consider the proposal for raising of funds on February 4.
Bata India: Company will announce its October-December quarter earnings on February 12.
Mishra Dhatu Nigam: Company will announce its October-December quarter earnings on February 8.
RPG Life Sciences: Company will announce its October-December quarter earnings on February 5.
JK Lakshmi Cement: Company will announce its October-December quarter earnings on February 8.
Arvind: Company will announce its October-December quarter earnings on February 7.
JK Cement: Company's officials will attend Motilal Oswal 10th Eureka Conference in London on February 12 and Edelweiss Cem Conference at Mumbai on February 14.
Mahindra Logistics: One-on-one meeting is scheduled to be held with Wellington Management, Institutional Investor at Mumbai on January 31.
Lakshmi Vilas Bank: Company will announce its October-December quarter earnings on February 4.
Cyient: Board meeting is scheduled on February 1 to consider the proposal of share buyback.
Phoenix Mills: Company will announce its October-December quarter earnings on February 7.
Stocks in news
Results on January 30: ICICI Bank, Bajaj Auto, Indian Oil Corporation, NTPC, Alembic, Jubilant Foodworks, Jindal Stainless (Hisar), MAS Financial Services, Mahindra Logistics, Chemfab Alkalis, Aavas Financiers, GMM Pfaudler, Security and Intelligence Services (India), GP Petroleums, Arvind SmartSpaces, Diligent Media Corporation, KIOCL, Marathon Nextgen Realty, Dixon Technologies (India), TTK Healthcare, Genus Paper & Boards, Shemaroo Entertainment, Castrol India, IIFL Holdings, International Paper APPM, Jindal Poly Investment and Finance Company, Alkyl Amines Chemicals, Vinati Organics, Bharat Electronics, IFB Agro Industries, EIH Limited, Torrent Pharmaceuticals, Gujarat Pipavav Port, DIC India, Astra Microwave Products, Orient Bell, Pioneer Distilleries, Cholamandalam Investment and Finance Company, BF Investment, Ashoka Buildcon, Sagar Cements, Tata Communications, JSW Energy, Ajanta Pharma, Future Market Networks, Bajaj Holdings & Investment, Heritage Foods, Emkay Global Financial Services, Blue Dart Express, Kolte - Patil Developers, Khandwala Securities, LIC Housing Finance, Ratnamani Metals & Tubes, Plastiblends India, Mahindra Holidays & Resorts India, BF Utilities, Indraprastha Medical Corporation, Dhampur Sugar Mills, Hexaware TechnologiesAxis Bank Q3: Profit surges to Rs 1,680.8 crore versus Rs 726 crore; NII rises 18.4 percent to Rs 5,603.6 crore versus Rs 4731.5 crore YoY.
Gross NPA improves to 5.75 percent versus 5.94 percent and net NPA to Rs 2.36 percent versus 2.54 percent QoQ.
HCL Technologies Q3: Profit rises 2.8 percent to Rs 2,611 crore versus Rs 2,540 crore; revenue jumps 5.6 percent to Rs 15,699 crore versus Rs 14,861 crore QoQ. Revenue in constant currency also up 5.6 percent QoQ.
HCL Technologies FY19 Guidance: Company maintains constant currency growth guidance at 9.5-11.5 percent and EBIT margin guidance at 19.5-20.5 percent.
Bank of Baroda Q3: Profit jumps to Rs 471.2 crore versus Rs 111.8 crore; NII grows 7.9 percent to Rs 4,743.2 crore versus Rs 4,394 crore YoY. Net NPA improves to 4.26 percent versus 4.86 percent and gross NPA to 11.01 percent versus 11.78 percent QoQ.
Apar Industries Q3: Profit falls 12.2 percent to Rs 35 crore versus Rs 40 crore; revenue increases 41.4 percent to Rs 2,119 crore versus Rs 1,498.9 crore YoY.
Godrej Consumer Q3: Profit slips 1.5 percent to Rs 424 crore versus Rs 430 crore; revenue increases 3.5 percent to Rs 2,721.9 crore versus Rs 2,630.3 crore YoY.
Granules India Q3: Profit jumps 72.3 percent to Rs 60 crore versus Rs 35 crore; revenue surges 53.8 percent to Rs 631.8 crore versus Rs 410.7 crore YoY.
Ramco Industries Q3: Profit dips 8 percent to Rs 10.7 crore versus Rs 11.7 crore; revenue drops 0.1 percent to Rs 181.3 crore versus Rs 181.4 crore YoY.
DCM Shriram Q3: Consolidated profit rises 5.7 percent to Rs 225 crore versus Rs 212.8 crore; revenue increases 18.6 percent to Rs 2,115.2 crore versus Rs 1,783.7 crore YoY.
Bajaj FinServ Q3: Consolidated profit jumps 16.4 percent to Rs 851 crore versus Rs 730.5 crore; revenue rises 24 percent to Rs 29,611 crore versus Rs 23,807 crore YoY.
KEC International Q3: Profit rises 0.6 percent to Rs 112.4 crore versus Rs 111.8 crore; revenue increases 10.1 percent to Rs 2,646.6 crore versus Rs 2,404.7 crore YoY.
Kingfa Science Q3: Profit falls 35 percent to Rs 530.9 crore versus Rs 817.1 crore; revenue dips 12.7 percent to Rs 16,336.7 crore versus Rs 18,704 crore QoQ.
Yes Bank: Madhu Kapur Group & Rana Kapoor Group to nominate one representative director each on board. Board approves & recommended to RBI an interim special duty. Director on interim special duty to have MD & CEO's responsibilities till March.
DCM Shriram: Company to invest Rs 1,070 crore in Bharuch plant.
Welspun Enterprises Q3: Profit jumps to Rs 43.4 crore versus Rs 15.65 crore; revenue rises to Rs 446.45 crore versus Rs 298.91 crore YoY.
Indiabulls Integrated Services Q3: Profit at Rs 1.5 crore versus loss at Rs 18.16 crore; revenue falls to Rs 42.63 crore versus Rs 45.04 crore YoY.
Indiabulls Integrated Services: The board approved the composite scheme of arrangement amongst the company, its direct and indirect subsidiaries and Indiabulls Pharmaceuticals (scheme). Shareholders will get extra shares of Indiabulls Enterprises (IEL), free of any cost, which will get listed on NSE and BSE. Post effectiveness of the Scheme, they will have shares of two listed entities - (1) the company, focusing on life and general insurance and related businesses, and (2) IEL, focusing on non-insurance businesses (including proposed pharma business and rural finance business).
Tata Coffee Q3: Profit plunges to Rs 11.23 crore versus Rs 42.88 crore; revenue rises to Rs 465.4 crore versus Rs 377.09 crore YoY.
Mahanagar Gas Q3: Profit rises to Rs 148 crore versus Rs 124 crore; revenue increases to Rs 824 crore versus Rs 638 crore YoY. Board declared an interim dividend of Rs 9.5 per share having face value of Rs 10 each (i.e. 95 percent) for FY19.
Orchid Pharma Q2: Loss at Rs 23.12 crore versus loss Rs 70.3 crore; revenue plunges to Rs 142.5 crore versus Rs 209.3 crore YoY.
Crompton Greaves Consumer Electricals Q3: Profit rises to Rs 79.67 crore versus Rs 69.5 crore; revenue increases to Rs 1,030.3 crore versus Rs 938.2 crore YoY.
Bharat Financial Inclusion Q3: Profit rises to Rs 288.4 crore versus Rs 233 crore; net interest income jumps 61 percent to Rs 582 crore versus Rs 361 crore YoY.
Coromandel International: A fire accident occurred at the product godown in one of manufacturing units at Sarigam, Gujarat. This unit manufactures crop protection chemicals. There is likely to be no significant impact on its operations.
Asian Paints: Company commenced commercial production at Vishakhapatnam plant, Andhra Pradesh.
Pokarna Q3: Consolidated profit rises to Rs 27.08 crore against Rs 14.50 crore; revenue increases to Rs 119.6 crore versus Rs 87.88 crore YoY.
DCM Shriram Q3: Profit increases to Rs 226 crore versus Rs 213 crore; revenue jumps to Rs 2,115 crore versus Rs 1,784 crore YoY.
Hawkins Cookers Q3: Profit flat at Rs 12.46 crore versus Rs 12.48 crore; revenue rises to Rs 174.7 crore versus Rs 139.2 crore YoY.
Subex Q3: Profit dips to Rs 2.06 crore versus Rs 3.61 crore; revenue falls to Rs 82.3 crore versus Rs 86.4 crore YoY.
HG Infra Engineering: Subsidiary Gurgaon Sohna Highway Private Limited received the financial closure letter from National Highway Authority of India.
Eris Lifesciences Q3: Profit rises to Rs 80 crore versus Rs 74.6 crore; revenue jumps to Rs 252.4 crore versus Rs 209 crore YoY.
5 stocks under ban period on NSE
Securities in ban period for the next day's trade under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.For January 30, Jain Irrigation Systems, DHFL, Bank of India, Adani Power and Adani Enterprises are present in this list.