The market corrected sharply for the second trading session in a row on October 19, with the Sensex falling more than 450 points as bears further tightened their grip on Dalal Street. Reliance’s mixed Q2 earnings, liquidity crisis in NBFCs, H1-B visa issue and weak global cues weighed on the market.
The Nifty 50 opened sharply lower at 10,339.70 and extended sell-off as the day progressed. It hit an intraday low of 10,249.60 in the afternoon, followed by a bit of recovery in the last hour of trade. The index closed 149.50 points lower at 10,303.50.
The Nifty 50 formed the small bearish candle (as the gap between opening and closing price was only 36 points), which resembles a “Spinning Top” kind of indecisive pattern.
“Nifty50 witnessed a gap down opening before signing off the session with ‘Spinning Top’ kind of formation as if it is confirming the reversal, with a follow through price action registered in last Wednesday’s session,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
On weekly charts this sell off resulted in “Bearish Engulfing” formation as the current week’s candle body completely covered that of last week which appears to have negated the bullish connotations of preceding week’s Hammer formation, he said.
Further, he pointed out that due to back-to-back sharp corrections, a pull back can’t be ruled out going forward in the next session, which ideally should be utilised to create fresh shorts. “On such a pull back move, bulls face resistance as they enter into the bearish gap zone of 10,380–10,436 levels registered in Friday’s session.”
According to Mazhar, if bulls manage to push the indices beyond 10,450 levels on closing basis then the said relief rally can get extended up to 10,617 level in the next couple of sessions.
Contrary to this, if indices breach 10,249 in the next session itself, then they shall retest the recent corrective swing lows of 10,138 level, he noted.
India VIX moved up by 10.05 percent at 19.78. A spurt in volatility after the dips of the last few sessions suggests that upside could be restricted again in the market.
We have collated the top 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
The Nifty 50 closed at 10,303.55 on Friday (Oct 19). According to Pivot charts, the key support level is placed at 10,242.03, followed by 10,180.57. If the index starts moving upwards, key resistance levels to watch out are 10,372.53 and then 10,441.57.
The Nifty Bank index closed at 25,085.80, down 102.80 points. The important Pivot level, which will act as crucial support for the index, is placed at 24,913.04, followed by 24,740.27. On the upside, key resistance levels are placed at 25,268.24, followed by 25,450.67.
Call Options Data
Maximum Call open interest (OI) of 43.56 lakh contracts was seen at the 10,600 strike price. This will act as a crucial resistance level for the October series.
This was followed by the 10,500 strike price, which now holds 38.57 lakh contracts in open interest, and 10,700, which has accumulated 37.84 lakh contracts in open interest.
Maximum call writing was seen at the strike price of 10,400, which added 15.09 lakh contracts, followed by 10,600 which added 12.09 lakh contracts and 10,300 which added 9.53 lakh contracts.
Call unwinding was seen at the strike price of 10,900, which shed 3.96 lakh contracts, followed by 10,700 which shed 0.85 lakh contracts and 9,800 which shed 0.44 lakh contracts.
Put Options data
Maximum Put open interest of 33.53 lakh contracts was seen at the 10,000 strike price. This will act as a crucial support level for the October series.
This was followed by the 10,200 strike price, which now holds 26.66 lakh contracts in open interest, and the 10,300 strike price, which has now accumulated 20.46 lakh contracts in open interest.
Put writing was seen at the strike price of 9,900, which added 5.69 lakh contracts in open interest, followed by 10,200 which added 5.20 lakh contracts and 9,700 which added 4.67 lakh contracts.
Put unwinding was seen at the strike price of 10,400, which shed 9.77 lakh contracts in open interest, followed by 10,500 which shed 8.68 lakh contracts and 10,600 which shed 4.52 lakh contracts.
FII & DII data
Foreign institutional investors (FIIs) sold shares worth Rs 618.26 crore and domestic institutional investors Rs 2.14 crore in the Indian equity market on Friday, 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.
29 stocks saw a long buildup
40 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
101 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.
34 stocks saw long unwinding
Indiabulls Housing Finance: William Blair Emerging Markets Growth Fund sold 24,79,838 shares of the company at Rs 691.84 per share on the NSE.
Repco Home Finance: Taiyo Greater India Fund sold 4,27,000 shares of the company at Rs 312.7 per share on the NSE.
Cantabil Retail: Shankar Growth Fund sold 1,02,805 shares of the company at Rs 132.36 per share on the NSE.
Analyst or Board Meet/Briefings
Ashika Credit Capital: Company announced postponement of board meeting on November 6.
Tata Sponge Iron: Board meeting is scheduled on October 24 to consider the opportunities for growth and consequent options for funding.
Stocks in news
Results on Monday: Asian Paints, CCL Products (India), Schaeffler India, Sundaram Finance Holdings, Hatsun Agro Product, Alembic Pharmaceuticals, Welspun India, Can Fin Homes, Manali Petrochemicals, Oberoi Realty, Kalyani Steels, Kalyani Investment Company, Hindustan Oil Exploration Company, Maharashtra Scooters, Omax Autos, Genus Power Infrastructures, GlaxoSmithKline Pharmaceuticals, Oriental Hotels, Hindustan Zinc, DCM Financial Services, INOX Leisure, Kansai Nerolac Paints, Jubilant Life Sciences, Lumax Industries, Lakshmi Machine Works, Sicagen India
HDFC Bank Q2: Profit grows 20.6 percent to Rs 5,005.73 crore versus Rs 4,151 crore; net interest income increases 20.6 percent to Rs 11,763.41 crore YoY. Gross NPA flat at 1.33 percent QoQ.
Persistent Systems Q2: Profit rises to Rs 88.14 crore versus Rs 87.35 crore; revenue increases to Rs 835.55 crore versus Rs 834.28 crore (QoQ).
Bhageria Industries Q2: Profit jumps to Rs 28.21 crore versus Rs 10.65 crore; revenue rises to Rs 126.62 crore versus Rs 91.76 crore (YoY)
Piramal Enterprises: Company strongly refutes all baseless rumours of any sort/form that have been floating around with respect to its real estate loan portfolio companies.