Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas said weekly and daily momentum indicators suggest the Nifty continues to be in a corrective phase
The market reversed most of its gains that were seen in the previous session and closed sharply lower on June 21. Escalated geopolitical tensions between the US and Iran and the RBI's concern over slowing economy dented traders' sentiment.
Sensex fell 407.14 points or 1.03 percent to 39,194.49, while Nifty shed 107.70 points or 0.91 percent to 11,724.10, forming a bearish candle on the daily as well as weekly charts. For the week, indices declined 0.65 percent and 0.8 percent, respectively.
"Bulls could not sustain the crucial upside area of 11,780-11,800 and the Nifty closed below it. Nifty showed weakness this week as per the weekly timeframe chart. A long negative candle was formed this week with a lower shadow. This pattern signals that the market is now preparing to witness a downside breakout of the previous three weeks range around 11,760 levels. This is a negative indication," Nagaraj Shetti – Senior Technical and Derivative Analyst, HDFC Securities, told Moneycontrol.
One may expect the Nifty to retest the recent lower support of 11,625 levels in the next week, he said.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas also said that the weekly and daily momentum indicators suggest the Nifty continues to be in a corrective phase.
"On the downside, 11,625-11,591 is the near term support zone with the overall target area being 11,250-11,200, he added.
The broader markets outperformed benchmark indices, with the Nifty Midcap and Smallcap indices closing flat with a negative bias. All sectoral indices closed in the red.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
Nifty closed at 11,724.10 on June 21. According to the Pivot charts, the key support level is placed at 11,676.8, followed by 11,629.5. If the index starts moving upward, key resistance levels to watch out are 11,799.7 and 11,875.3.
The Nifty Bank closed at 30,628.35, down 152.75 points on June 21. The important Pivot level, which will act as crucial support for the index, is placed at 30,511.57, followed by 30,394.83. On the upside, key resistance levels are placed at 30,774.97, followed by 30,921.63.
Call options data
Maximum Call open interest (OI) of 42.27 lakh contracts was seen at the 12,000 strike price. This will act as a crucial resistance level for the June series.
This is followed by 11,800 strike price, which now holds 30.82 lakh contracts in open interest, and 11,900, which has accumulated 27.85 lakh contracts in open interest.
Significant Call writing was seen at 12,000 strike price that added 14.36 lakh contracts, followed by 11,800 strike price that added 12.14 lakh contracts and 11,900 strike price, which added 9.32 lakh contracts.
Call unwinding was seen at the strike price of 12,200, which shed 4.45 lakh contracts, followed by 12,400 strike that shed 0.64 lakh contracts.
Put options data
Maximum Put open interest of 34.24 lakh contracts was seen at 11,700 strike price. This will act as a crucial support level for the June series.
This was followed by 11,500 strike price, which now holds 29.78 lakh contracts in open interest and 11,600 strike price, which has now accumulated 23.64 lakh contracts in open interest.
Put writing was seen at the 11,200 strike price, which added 0.53 lakh contracts, followed by 11,300 strike price that added 0.43 lakh contracts.
Put unwinding was seen at the strike price of 11,800, which shed 4.16 lakh contracts, followed by 11,500 strike price, which shed 1.88 lakh contracts and 11,700 strike that shed 1.56 lakh contracts.
Stocks with a high delivery percentage
High delivery percentage suggests that investors are accepting the delivery of the stock, which means that investors are bullish on it.
31 stocks saw a long buildup
42 stocks that saw short covering
A decrease in open interest, along with an increase in price, mostly indicates short covering.
73 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.
50 stocks saw long unwinding
Analyst or Board Meetings/Briefings
Vishal Bearings: A board meeting is scheduled on June 29 to consider the appointment of a company secretary.
Container Corporation of India: Company's officials will meet Anand Gupta, India Portfolio Manager, Eastspring on June 24.
Bajaj Finserv: Company's officials will meet certain institutional investors in the US on June 25-26 and in the UK on June 27-28.
Mahindra & Mahindra: Company's officials will meet Grandeur Peak Funds on June 24 and SMBC Nikko Securities on June 26.
Bank of Baroda: Board meeting is scheduled on June 27 to approve the opening balance sheet of the amalgamated bank as at April 1, 2019, i.e. post amalgamation of Vijaya Bank and Dena Bank with Bank of Baroda.
Varun Beverages: Company will meet the institutional investors in London on June 24 and June 25.
Apollo Tyres: Shareholder's meeting to be held on July 31.
Quick Heal Technologies: Annual General Meeting to be held on July 15, 2019.
Stocks in news
Tata Steel: Fitch affirms BB rating with a stable outlook.
Piramal Enterprises: No proposal placed before the board for approval on raising funds from marquee investors.
UPL: Company fixed July 3 as record date for issue of bonus shares.
Bandhan Bank: National Company Law Tribunal approves the merger of Gruh Finance with Bandhan Bank.
Max India: Radiant Life Care completes its acquisition of a 49.7 percent stake in Max Healthcare from Life Healthcare.
Cipla: Peter Lankau resigned as an Independent Director to the company.
Sun TV Network: Company appointed Mathipoorana Ramakrishnan as an Additional Director (Woman Independent Director) for a period of five years.
Star Cement: Company approved a proposal to buyback upto 68 lakh fully paid-up equity shares, at a price of Rs 150 per share, for an aggregate consideration not exceeding Rs 102 crore.
CG Power: Company sold 13 acre of land to Evie Real Estate for Rs 490 crore.
Mahindra Holidays: Iiro Rossi resigned as the CEO of Holiday Club Resorts Oy, Finland, a subsidiary of the company.
Future Enterprises: CARE reaffirmed its rating on the company's commercial paper at A1+.
Zen Technologies: CARE revised the comapny's rating on long term/short term bank facilities to BBB with stable outlook/A3+, down from BBB- with stable outlook/A3.
EPIC Energy: The company has appointed Nikhil Morsawala as Chief Financial Officer and Atul Mishra as Manager of the company.
Kabra Extrusiontechnik: Crisil downgraded the comapny's long term rating to A with stable outlook from A+ with a negative outlook.
CARE Ratings: CFO Nitinkumar Agrawal resigns
NTPC: Fitch affirms rating at BBB- with a stable outlook.
FII & DII data
Foreign Institutional Investors (FIIs) sold shares worth net Rs 730.58 crore but Domestic Institutional Investors (DIIs) bought Rs 445.75 crore worth of shares in the Indian equity market on June 21, as per provisional data available on the NSE.
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Fund flow picture
Five stocks under F&O ban period on NSE
For June 24, IDBI Bank, Jet Airways, Jain Irrigation Systems, Reliance Capital and Reliance Infrastructure are under the F&O ban period.Securities in ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.