The market fell 1.6 percent on May 6 and remained under intense selling pressure in three out of four trading sessions in the truncated week. Every sector was caught in a bear trap. Market breadth remained in favour of declines with an advance-decline ratio of 1:5. Weak global cues weighed on the sentiment.
The BSE Sensex tanked 867 points to 54,836 and the Nifty50 fell 271 points to 16,411, while the Nifty Midcap 100 and Smallcap 100 indices have fallen 1.8 percent and 2.5 percent respectively.
The Nifty index formed a Doji kind of candle on the daily charts on Friday, but there was a large bearish candle formation on the weekly scale, which experts feel emphasises the clear cut bear domination.
In this process, “it bridged the bullish gap present between 16,447 and 16,418 levels, registered on March 10, which was supposed to act as a support point. Hence, remaining below 16,400 levels, the next logical target for the index shall be around 16,150 levels,” Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.
In between, the market expert said any pullback attempt may perish around 16,650 levels unless the index registers a strong close above the Friday’s bearish gap zone present between 16,484 and 16,651 levels. As the trend is clearly on the downside, strength can be an opportunity to create fresh short positions, he advised.
We have collated 15 data points to help you spot profitable trades:
Note: The open interest (OI) and volume data of stocks given in this story are the aggregates of three-month data and not of the current month only.
Key support and resistance levels on the Nifty
As per the pivot charts, the key support level for the Nifty is placed at 16,340, followed by 16,269. If the index moves up, the key resistance levels to watch out for are 16,483 and 16,555.
Nifty Bank
Nifty Bank was one of the key sectors that pulled the market sharply on Friday, falling 642 points to close at 34,591. The important pivot level, which will act as crucial support for the index, is placed at 34,364, followed by 34,136. On the upside, key resistance levels are placed at 34,808 and 35,025 levels.
Call option data
Maximum Call open interest of 26.07 lakh contracts was seen at 17,000 strike, which will act as a crucial resistance level in the May series.
This is followed by 17,500 strike, which holds 21.97 lakh contracts, and 18,000 strike, which has accumulated 18.98 lakh contracts.
Call writing was seen at 16,500 strike, which added 8.72 lakh contracts, followed by 16,400 strike which added 7.72 lakh contracts and 16,800 strike which added 3 lakh contracts.
Call unwinding was seen at 17,000 strike, which shed 2.17 lakh contracts, followed by 17,400 strike which shed 1.48 lakh contracts and 17,100 strike which shed 1.32 lakh contracts.
Put option data
Maximum Put open interest of 41.47 lakh contracts was seen at 16,000 strike, which will act as a crucial support level in the May series.
This is followed by 16,500 strike, which holds 35.85 lakh contracts, and 15,500 strike, which has accumulated 23.43 lakh contracts.
Put writing was seen at 16,400 strike, which added 5.78 lakh contracts, followed by 16,000 strike, which added 4.36 lakh contracts and 15,500 strike which added 3.35 lakh contracts.
Put unwinding was seen at 17,000 strike, which shed 4.81 lakh contracts, followed by 16,500 strike which shed 2.58 lakh contracts, and 16,700 strike which shed 2 lakh contracts.
Stocks with a high delivery percentage
A high delivery percentage suggests that investors are showing interest in these stocks. The highest delivery was seen in Honeywell Automation, Navin Fluorine International, SBI Cards and Payment Services, HDFC Bank, and Aarti Industries, among others.
12 stocks saw long build-up
An increase in open interest, along with an increase in price, mostly indicates a build-up of long positions. Based on the open interest future percentage, here are the top 10 stocks including ABB India, Colgate Palmolive, Gujarat Gas, Honeywell Automation, and Hero MotoCorp, in which a long build-up was seen.
73 stocks saw long unwinding
A decline in open interest, along with a decrease in price, mostly indicates a long unwinding. Based on the open interest future percentage, here are the top 10 stocks including Coforge, Can Fin Homes, JK Cement, United Breweries, and Aditya Birla Capital, in which long unwinding was seen.
99 stocks saw short build-up
An increase in open interest, along with a decrease in price, mostly indicates a build-up of short positions. Based on the open interest future percentage, here are the top 10 stocks including Torrent Power, Federal Bank, Astral, Canara Bank, and TVS Motor Company, in which a short build-up was seen.
16 stocks witnessed short-covering
A decrease in open interest, along with an increase in price, mostly indicates a short-covering. Based on the open interest future percentage, here are the top 10 stocks including Oracle Financial Services Software, HDFC AMC, Tech Mahindra, Escorts, and Abbott India, in which short-covering was seen.
Results on May 9
UPL, PVR, Godrej Agrovet, Infibeam Avenues, Dalmia Bharat, Gujarat Narmada Valley Fertilizers & Chemicals, 3i Infotech, Aarti Drugs, BASF India, Borosil, Central Bank of India, CMS Info Systems, Craftsman Automation, Vedant Fashions, Suven Pharmaceuticals, VST Tillers Tractors, ISMT, Mold-Tek Packaging, Visaka Industries, and Vishwaraj Sugar Industries will release quarterly earnings on May 9.
Stocks in News
Reliance Industries: The oil-telecom-to-retail major reported 20.2 percent year-on-year growth in consolidated profit at Rs 18,021 crore in the quarter ended March 2022 led by strong operating income as well as topline. Revenue in Q4FY22 grew by 35 percent to Rs 2,32,539 crore and EBITDA surged 28 percent to Rs 33,968 crore during the same period, boosted by all key segments – telecom, retail and oil-to-chemical.
Campus Activewear: The company will make its debut on the BSE and NSE on May 9.
HCL Technologies: The IT services company’s UK-based subsidiary has acquired Switzerland-based digital banking and wealth management specialist Confinale AG, for 53 million CHF (Swiss Francs). The said acquisition is likely to be completed by July 1, 2022.
Shipping Corporation of India: The company recorded a massive 77.4 percent year-on-year growth in consolidated profit at Rs 152 crore in the quarter ended March 2022 on strong topline and operating income. Revenue from operations grew by 50 percent to Rs 1,314.5 crore during the same period.
Go Fashion India: The women’s bottom-wear brand reported a 73 percent year-on-year growth in profit at Rs 12 crore in Q4FY22 driven by healthy operating income and revenue. Revenue from operations grew by 29 percent to Rs 116 crore and EBITDA increased 53 percent to Rs 38 crore compared to the year-ago period, with volume growth of 11 percent YoY.
Hariom Pipe Industries: The company recorded a 44.5 percent year-on-year growth in profit at Rs 9.77 crore in quarter ended March 2022 despite higher input cost and power & fuel expenses, led by a strong topline. Revenue grew by 33 percent YoY to Rs 124.2 crore in the same quarter.
Equitas Holdings: The Reserve Bank of India has approved the amalgamation between Equitas Holdings and Equitas Small Finance Bank.
Tata Power Company: The company reported a 31.4 percent year-on-year growth in profit at Rs 632.4 crore on strong topline and operating income in the quarter ended March 2022. Revenue from operations increased by 15.4 percent to Rs 11,960 crore during the same period.
Mindtree, L&T Infotech: L&T Group announced a merger of Mindtree and L&T Infotech to create India’s next large-scale IT services player. All shareholders of Mindtree will receive 73 shares of L&T Infotech for every 100 shares held. Larsen & Toubro will hold 68.73 percent of L&T Infotech after the merger.
FII and DII data
There was an intense selling pressure by foreign institutional investors (FIIs) on May 6 as they have net offloaded shares worth Rs 5,517.08 crore. However, domestic institutional investors (DIIs) remained net buyers, to the tune of Rs 3,014.85 crore worth of shares on same day, as per provisional data available on the NSE.
Stocks under F&O ban on NSE
The NSE has not put any stock under the F&O ban for seventh consecutive session on May 9, especially since the beginning of May series. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.