We have seen a healthy rebound amid consolidation on August 28 after two days of correction, but experts are not convinced by the bounce back, though it is on expected lines suggested by the Inverted Hammer kind of pattern formation on the weekly charts. They expect the rangebound trade to continue unless the Nifty50 breaches 19,400 on the higher side which can take the index up to the 19,600 hurdle, whereas the 19,200-19,300 range is expected to be a support area in the near term.
The BSE Sensex jumped 110 points to 64,997, while the Nifty50 rose 40 points to 19,306 and formed a Doji kind of pattern on the daily charts after bearish candlestick pattern formation in the previous session, indicating the possibility of rangebound trade in the coming days.
"The Nifty has taken support from 19,260 four times in the last 10 trading sessions, making it a strong support for the index. The index managed to hold above the 50-day exponential moving average (DEMA) of 19,286, after closing below the same in the previous trading session," Ashwin Ramani, derivatives & technical analyst at SAMCO Securities said.
Hence, he believes that a breakdown below 19,260 will lead to the initiation of fresh shorts which can take the index to 19,000. However, for the momentum to pick up on the upside, the Nifty needs to break the 19,500 barrier, which is the level where maximum Call open interest is placed, he said.
The broader markets fared better than benchmarks on positive breadth. The Nifty Midcap 100 and Smallcap 100 indices gained half a percent and seven-tenth of a percent respectively, while the volatility jumped to a three-month high. India VIX, the fear index rose 2.6 percent to 12.40 levels, which is a bit for bears.
Key support and resistance levels on Nifty
The pivot point calculator indicates that the Nifty may get support at 19,263, followed by 19,235 and 19,190. In case of an upside, 19,352 can be the key resistance, followed by 19,380 and 19,425.
On August 28, the banks provided good support to the market, as Bank Nifty rallied 263 points to close a tad below 44,500 levels, at 44,495, which coincides with the 50-day EMA (exponential moving average). The index has formed a bullish candlestick pattern on the daily charts with lower-than-average volumes.
"The option activity at 44,500 strike will provide cues about the Bank Nifty’s future direction as both Call and the Put writers are fighting it out to dethrone each other," Ramani said.
He feels a close above Monday’s high of 44,610 can result in bulls coming back in the Bank Nifty.
The pivot point calculator indicates that the Bank Nifty is likely to take support at 44,279, followed by 44,183 and 44,026. On the upside, the initial resistance is at 44,592, followed by 44,688 and 44,844.
As per the options data, the maximum monthly Call open interest (OI) was seen at 19,500 strike with 1.28 crore contracts, which can act as a key resistance for the Nifty. It was followed by 19,400 strike, which had 97.4 lakh contracts, while 19,600 strike had 87.44 lakh contracts.
The maximum Call writing was seen at 19,600 strike, which added 7.93 lakh contracts, followed by 19,500 and 20,100 strikes, which added 5.96 lakh and 2.04 lakh contracts, respectively.
We have seen the maximum Call unwinding at 19,300 strike, which shed 15.13 lakh contracts, followed by 19,800 strike and 19,700 strike, which shed 10.36 lakh contracts, and 9.18 lakh contracts, respectively.
On the Put front, we have seen the maximum Put open interest at 19,300 strike, with 1.08 crore contracts. This can be an important support for Nifty in the coming sessions.
It was followed by 19,000 strike, comprising 94.85 lakh contracts, and 19,200 strike with 83.47 lakh contracts.
The maximum Put writing was seen at 19,300 strike, which added 51.17 lakh contracts, followed by 19,200 strike and 18,600 strike, which added 21.39 lakh and 14.01 lakh contracts, respectively.
Meaningful Put unwinding was at 19,500 strike, which shed 6.94 lakh contracts, followed by 18,400 and 19,400 strikes, which shed 3.54 lakh and 2.45 lakh contracts, respectively.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in the stock. HDFC Life Insurance Company, Infosys, Bharti Airtel, Bajaj Auto, and Pidilite Industries were among the stocks that saw the highest delivery.
Indiabulls Housing Finance, ONGC, Punjab National Bank, Piramal Enterprises, and PFC were among the 71 stocks to see a long build-up. An increase in open interest (OI) and price indicates a build-up of long positions.
Based on the OI percentage, 15 stocks, including Coforge, Sun TV Network, GMR Airports Infrastructure, Escorts Kubota, and Wipro saw long unwinding. A decline in OI and price indicates long unwinding.
26 stocks see a short build-up
A short build-up was seen in 26 stocks, including Mphasis, Delta Corp, Dr Lal PathLabs, Info Edge India, and Reliance Industries. An increase in OI along with a fall in price points to a build-up of short positions.
Based on the OI percentage, 73 stocks were on the short-covering list. These included Metropolis Healthcare, Ramco Cements, Oracle Financial, Jubilant Foodworks, and Tata Chemicals. A decrease in OI along with a price increase is an indication of short-covering.
Tiger Global Management has offloaded Rs 1,123.85 crore shares in Zomato.
ICICI Prudential Life and Fidelity picked a 3.35 percent stake in Star Health, while University of Notre, Mio IV Star offloaded 3.4 percent shares.
(For more bulk deals, click here)
Investors meeting on August 29
Stocks in the newsSun Pharmaceutical Industries: The pharma major expects high-single-digit consolidated topline growth for FY24. The expansion of its global speciality business is expected to continue, while the research & development (R&D) spending is expected to be about 7-8 percent of sales in FY24 with an increasing share of spending in specialty R&D.
Indiabulls Real Estate: Atul Chandra is appointed as Chief Operating Officer of the real estate firm, with effect from August 28. Presently, Chandra is the senior vice president of the company.
NBCC India: The state-owned construction company has bagged a work order worth Rs 66.32 crore from the Indian Medical Association. The said work order included planning, designing and executing of IMA House at Indraprastha, New Delhi. The order is expected to be executed within 30 months.
SJVN: Subsidiary SJVN Green Energy has received a Letter of Award from Assam Power Development Corporation (APDCL) for three solar power projects with a cumulative capacity of 320 MW. These three solar power projects will be developed on a build-own-and-operate (BOO) basis and are expected to generate a cumulative 628 MUs in the first year and the cumulative energy generation over a period of 25 years would be about 14,591 MUs.
LTIMindtree: The technology consulting and digital solutions company has announced a strategic collaboration with SaaS company CAST AI which specialises in automated cost optimisation for customers who run their cloud-native applications on Google Cloud, AWS, and Microsoft Azure.
Bayer CropScience: Duraiswami Narain has resigned as the Vice Chairman & Managing Director and Chief Executive Officer of the company with effect from October 31, 2023 due to his planned repatriation to Bayer US. The company appointed Simon Weibusch as the Vice Chairman, Managing Director and CEO with effect from November 1, 2023. Weibusch resigned as the Executive Director as the Whole-time Director of the company with effect from October 31, 2023.
HFCL: The Fund Raising Committee of Directors of the company has decided to launch a qualified institutional placement (QIP) issue on August 28, for fundraising. The floor price for the issue has been fixed at Rs 68.61 per share.
Fund Flow
Foreign institutional investors (FII) sold shares worth Rs 1,393.25 crore, whereas domestic institutional investors (DII) purchased Rs 1,264.01 crore worth of stocks on August 28, provisional data from the National Stock Exchange (NSE) showed.
Stocks under F&O ban on NSEThe NSE has added Indiabulls Housing Finance to its F&O ban list for August 29, while retaining BHEL, Escorts Kubota, GMR Airports Infrastructure, Hindustan Copper, India Cements, Manappuram Finance, RBL Bank, and Sun TV Network in the list.
Securities banned under the F&O segment include companies where derivative contracts have crossed 95 percent of the market-wide position limit.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
