According to Gaurav Ratnaparkhi of Sharekhan by BNP Paribas, overall structure suggests that the consolidation can continue for couple of sessions before the next move starts on the downside.
Finally, the much-warranted market pull back was seen on August 6 after a sharp sell-off in last few sessions. The optimism about a likely rate cut by Reserve Bank of India's Monetary Policy Committee on August 7 and short covering lifted benchmark indices.
The BSE Sensex climbed 277.01 points to 36,976.85, while the Nifty50 rallied 85.70 points to 10,948.30 and formed strong bullish candle which resembles a Bullish Engulfing kind of pattern on daily charts after a Hammer pattern formation in previous session.
"After the formation of important bottom reversal pattern like 'Hammer' on Monday (August 5), the Nifty witnessed a much awaited follow-through intraday upmove, thereby confirming a reversal pattern at the lows of the 10,782 level. This pattern resembles a formation of Bullish Engulfing at the lows (not a classical one)," Nagaraj Shetti, Technical Research Analyst, HDFC Securities told Moneycontrol.
He added that the chart pattern of August 5 and 6 could signal a possibility of upside bounce in the market. The next upside resistance will be watched at 11,100, he added.
According to Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas, the overall structure suggests that consolidation can continue for a couple of sessions before the next move starts on the downside. "The consolidation can take place in the range of 10,800-11,000."
All sectoral indices (except IT) participated in the rally with bank, auto, metal gaining more than 1 percent. The broader markets outperformed frontliners as the Nifty Midcap index gained 2 percent and Smallcap index rose 1.8 percent.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
The Nifty closed at 10,948.25 on August 6. According to pivot charts, the key support level is placed at 10,835.17, followed by 10,722.13. If the index starts moving upward, the key resistance levels to watch out for are 11,039.87 and 11,131.53.
The Nifty Bank closed at 28,022.10, up by 374.05 points on August 6. The important pivot level, which will act as crucial support for the index, is placed at 27,634.53, followed by 27,246.97. On the upside, key resistance levels are placed at 28,279.03 and 28,535.97.
Call options data
Maximum Call open interest (OI) of 22.2 lakh contracts was seen at the 11,000 strike price. It will act as a crucial resistance level in the August series.
This is followed by 11,500 strike price, which now holds 21.21 lakh contracts in open interest, and 11,300, which has accumulated 17.97 lakh contracts in open interest.
Significant Call writing was seen at the 11,200 strike price, which added 1.39 lakh contracts, followed by 11,400 strike price, which added 0.79 lakh contracts. This was followed by 11,000 strike, which added 0.61 lakh contracts.
Call unwinding was seen at 10,900 strike, which shed 1.31 lakh contracts, followed by 11,600 strike, which shed 0.97 lakh contracts and 11,500 strike, which shed 0.916 lakh contracts.
Put options data
Maximum Put Open Interest of 30.22 lakh contracts was seen at 11,000 strike price. It will act as a crucial support level in August series.
This is followed by 10,800 strike price, which now holds 18.68 lakh contracts in Open Interest and 10,500 strike price, which has now accumulated 18.63 lakh contracts in Open Interest.
Put writing was seen at the 10,700 strike price, which added 3.57 lakh contracts, followed by 10,500 strike, which added 1.89 lakh contracts and 10,900 strike, which added 1.49 lakh contracts.
Put unwinding was seen at the 10,600 strike price, which shed 0.80 lakh contracts, followed by 11,100 strike that shed 0.34 lakh contracts and 11,300 strike price which shed 0.19 lakh contracts.
Stocks with a high delivery percentage
A high delivery percentage suggests that investors are accepting delivery of the stock, which means investors are bullish on it.
56 stocks saw a long buildup
76 stocks that saw short-covering
A decrease in Open Interest, along with an increase in price, mostly indicates a short covering.
21 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.
11 stocks saw long unwinding
Analyst or Board Meetings/Briefings
Redington (India): Analyst/Investors conference call on the financial results for the quarter ended June 2019 is scheduled to be held on August 13.
GAIL India: Analyst Meet/conference call to be held on August 9 to discuss the results for the quarter ended June 2019.
Endurance Technologies: A telephonic discussion with Capital World Investors has been scheduled on August 9.
Kilitch Drugs: Company will announce June quarter earnings on August 13.
Man Infraconstruction: Company will announce June quarter earnings on August 13.
Power Finance Corporation: Company will announce June quarter earnings on August 13.
Sharon Bio-Medicine: Company will announce June quarter earnings on August 14.
Mcleod Russel: Company will announce June quarter earnings on August 14.
PNC Infratech: Equirus will be hosting a Conference Call with the management of company on August 14.
Balkrishna Industries: Analyst/institutional investor meetings are scheduled to be held on August 13 to discuss the Q1FY20 results.
Stocks in news
Results on August 7: Tata Steel, HCL Technologies, Lupin, Cipla, Aurobindo Pharma, Mahindra & Mahindra, Siemens, HPCL, Honda Siel Power Products, Birlasoft, GOCL Corporation, Anup Engineering, Praxis Home Retail, Voltas, Dollar Industries, Signet Industries, Bhagyanagar Properties, Tasty Bite Eatables, Geojit Financial Services, Aster DM Healthcare, DCM Nouvelle, Garware Technical Fibres, Adani Gas, Adani Power, Adani Ports, Adani Green Energy, Matrimony.Com, INEOS Styrolution India, Navkar Corporation, IZMO, Bhagyanagar India, Lemon Tree Hotels, Surana Solar, Ramco Cements, Themis Medicare, Tata Teleservices (Maharashtra), Star Paper Mills, Rajesh Exports, Welspun Investments, Allcargo Logistics, Maharashtra Seamless, Sundram Fasteners, Schneider Electric Infrastructure, Ingersoll Rand, GeeCee Ventures, Cummins India, BAG Films and Media, AstraZeneca Pharma, Welspun Corp, Punjab & Sind Bank, Indian Metals & Ferro Alloys, Kalyani Steels, SREI Infrastructure Finance, Kalyani Investment, Gravita India, Sonata Software, Surana Telecom and Power, Patspin India, KEC International, Precision Wires India, Shreyas Shipping, J Kumar Infraprojects, Phoenix Mills, GTN Textiles, Kothari Sugars, KCP Sugar, Oracle Financial Services Software, Jindal Drilling, Sudarshan Chemical Industries, Ramco Industries, India Cements, Gokul Refoils, Uttam Sugar Mills, Gujarat Lease Financing, Ramco Systems, Balrampur Chini Mills, Bajaj Electricals, ITI, PTC India.
Reliance Industries: Company and BP agreed to form a new joint venture that will include a retail service station network and aviation fuels business across India. Reliance to hold 51 percent stake and rest is held by BP in new fuel retail joint venture.
Indiabulls Housing Finance Q1: Consolidated profit falls to Rs 801.5 crore versus Rs 1,054.72 crore, net interest income declines 12.7 percent to Rs 1,475 crore versus Rs 1,690 crore YoY.
Indiabulls Housing Finance: Board approves raising up to Rs 1,000 crore through debt and Rs 25,000 crore via NCDs.
Central Bank of India Q1: Profit at Rs 118.3 crore against loss of Rs 1,522.2 crore and NII rises 6.7 percent to Rs 1,790.2 crore versus Rs 1,678.2 crore YoY. Gross NPA rises to 19.93 percent versus 19.29 percent, net NPA increases to 7.98 percent versus 7.73 percent QoQ.
Cox & Kings: Company defaulted on Rs 5 crore payments on unsecured commercial paper.
IRB Infrastructure Q1: Profit dips 17.4 percent to Rs 206.6 crore versus Rs 250 crore, revenue rises 15.3 percent to Rs 1,773 crore versus Rs 1,538 crore YoY. Singapore's GIC to invest Rs 4,400 crore in company's road operations.
Avenue Supermarts: Radhakishan Damani to sell 62.3 lakh shares to meet minimum public shareholdling norms. Company issued commercial paper of Rs 50 crore.
Jet Airways: All resolutions passed by Committee of Creditors with requisite majority. CoC also approves evaluation matrix, request for resolution plan.
Tata Steel: Company terminated stake sale of South East Asia business to HBIS. Company had inked agreement to sell 70 percent of South East Asia business to HBIS in January.
Shemaroo Entertainment Q1: Consolidated profit dips to Rs 16.15 crore versus Rs 19.54 crore, revenue rises to Rs 143.03 crore versus Rs 123.36 crore YoY.
JK Lakshmi Cement Q1: Consolidated profit jumps to Rs 49.81 crore versus Rs 6.05 crore; revenue rises to Rs 1,136 crore versus Rs 1,040 crore YoY.
Zensar Technologies Q1: Consolidated profit falls to Rs 74.51 crore versus Rs 82.16 crore; revenue rises to Rs 1,071 crore against Rs 904.66 crore YoY.
HSIL Q1: Profit jumps to Rs 14.34 crore versus Rs 2.10 crore, revenue falls to Rs 439 crore versus Rs 542.41 crore YoY.
MBL Infrastructures: Company has completed work of project for improvement/upgradation of roads and bridges of Shivganj—Rafiganj—Goh—Uphara—Devkund— Baidrabad Road (SH—68), Package. Bihar (contract value was Rs 168.53 crore).
Gujarat State Fertilizers & Chemicals Q1: Consolidated profit dips to Rs 41.82 crore versus Rs 70.11 crore, revenue declines to Rs 1,721 crore versus Rs 1,762.7 crore YoY.
Star Cement: ICRA reaffirmed its long term rating to AA- and short term rating to A1+. The outlook on the long-term rating is 'Stable'.
Borosil Glass Works Q1: Consolidated profit drops to Rs 9.4 crore versus Rs 10.5 crore, revenue rises to Rs 172.85 crore versus Rs 155.33 crore YoY.
Deccan Cements Q1: Profit rises to Rs 23.3 crore versus Rs 11.3 crore, revenue climbs 12.6 percent to Rs 182 crore versus Rs 161.7 crore YoY.
JSW Energy Q1: Consolidated profit increases to Rs 244.38 crore versus Rs 229.17 crore, revenue rises to Rs 2,412.2 crore versus Rs 2,360.6 crore YoY.
Khadim India Q1: Profit falls to Rs 3.35 crore versus Rs 7.4 crore, revenue rises to Rs 216 crore versus Rs 189.6 crore YoY.
Excel Crop Care Q1: Profit dips to Rs 23.2 crore versus Rs 38.92 crore, reveneu declines to Rs 378.85 crore versus Rs 402.8 crore YoY.
NLC India: Company decided not to pursue the setting up of pilot plant for coldry matmor integrated project on R&D collaborative mode as agreed to between NLCIL & NMDC & ECT Australia.
Lux Industries Q1: Consolidated profit rises to Rs 18.77 crore versus Rs 17.51 crore, revenue increases to Rs 262.8 crore versus Rs 262.3 crore YoY.
REC: Company approved the proposals for sale and transfer of wholly owned subsidiaries of REC Transmission Projects Company Limited (RECTPCL) and REC Limited.
Mayur Uniquoters Q1: Consolidated profit falls to Rs 9.74 crore versus Rs 22.86 crore, revenue dips to Rs 127.35 crore versus Rs 140.3 crore YoY.
Sheela Foam Q1: Consolidated profit rises to Rs 38.72 crore versus Rs 32.59 crore, revenue increases to Rs 514.24 crore versus Rs 502 crore YoY.
Shriram EPC Q1: Consolidated profit increases to Rs 6.45 crore versus Rs 5.51 crore, revenue rises to Rs 382 crore versus Rs 129.87 crore YoY.
Nilkamal Q1: Consolidated profit falls to Rs 31.06 crore versus Rs 33.58 crore, revenue dips to Rs 536.5 crore versus Rs 585.1 crore YoY.
NLC India Q1: Consolidated profit dips to Rs 288.1 crore versus Rs 355 crore, revenue drops to Rs 2,082.2 crore versus Rs 2,438 crore YoY.
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FII & DII data
Foreign Institutional Investors (FIIs) sold shares worth Rs 2,107.93 crore, but Domestic Institutional Investors (DIIs) bought Rs 2,289.05 crore worth of shares in the Indian equity market on August 6, as per provisional data available on the NSE.
Fund Flow Picture
No stock under F&O ban period on NSE
For August 7, not a single stock is under the F&O ban period.
Securities under the ban period under the F&O segment include companies in whose security has crossed 95 percent of the market-wide position limit.Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.