The market remained volatile and finally closed the monthly F&O expiry session with moderate losses on February 23, continuing its southward journey for the fifth day in a row as Fed officials maintained their focus on more rate hikes to tame inflation.
The BSE Sensex was down 139 points at 59,606, while the Nifty50 dropped 43 points to 17,511, the lowest closing level since October 18 last year, and formed a bearish candle with upper and lower shadows on the daily charts. The index continued making lower highs and lower lows for the fifth consecutive session.
“A small negative candle was formed on the daily chart which indicates the formation of a high wave type candle pattern. Normally, such pattern formation after a reasonable downward correction signals possible upside bounce,” Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.
The Nifty is currently placed near the crucial support of 17,400-17,300 levels and has recovered decently on the upside in the recent past.
He says the support of 200-day EMA (exponential moving average – 17,591) has been instrumental with regard to an important trend reversal in the past. “The downside violation of this moving average support at 17,590 levels signals a higher possibility of sizable upside bounce in the market from the said lower supports for the short term. Immediate resistance is placed at 17,650 levels,” the expert said.
The broader markets closed flat with a negative bias as the Nifty Midcap 100 and Smallcap 100 indices were down by 0.15 percent and 0.08 percent respectively.
We have collated 15 data points to help you spot profitable trades:
Key support and resistance levels on the Nifty
As per the pivot charts, the Nifty has support at 17,466, followed by 17,427 and then 17,364. If the index moves up, the key resistance levels to watch out for are 17,592, followed by 17,631 and 17,694.
Nifty Bank
The Nifty Bank settled the session at 40,002, up 6 points after volatility, which is still near its 200-day EMA (40,007). The index has formed a Doji kind of pattern with a long lower shadow on the daily charts, indicating indecisiveness but there was support-based buying at lower levels, hinting at the possibility of some kind of bounce after selling pressure in the last few sessions. It has been making lower highs and lower lows for the fifth straight session.
“The index if it manages to hold Thursday’s low can witness a recovery towards 40,500 levels. The index’s immediate hurdle is at 40,200, above which it can witness a short covering move. The index downside support stands at 39,500 and if the said support breaches, it will aggravate the selling pressure,” Kunal Shah, Senior Technical Analyst at LKP Securities said.
The important pivot level, which will act as a support, is at 39,707, followed by 39,578 and 39,369. On the upside, key resistance levels are 40,126, followed by 40,255, and 40,464.
Call option data
On a monthly basis, the maximum Call open interest (OI) was seen at 18,000 strike, with 1.02 crore contracts, which may remain a crucial resistance level for the Nifty in the coming March series.
This is followed by a 17,600 strike, comprising 94.99 lakh contracts, and a 17,700 strike, where there are more than 66.02 lakh contracts.
Call writing was seen at 17,600 strike, which added 17.45 lakh contracts, followed by 17,500 strike which added 13.43 lakh contracts and 17,400 strike which added 1.01 lakh contracts.
We have seen Call unwinding in 17,800 strike, which shed 55.81 lakh contracts, followed by 17,900 strike, which shed 55.39 lakh contracts, and 18,000 strike which shed 50.23 lakh contracts.
Put option data
On a monthly basis, we have seen the maximum Put OI at 17,500 strike, with 1.27 crore contracts, which is expected to act as a crucial support zone for the Nifty50 in the March series.
This is followed by the 17,000 strike, comprising 64.71 lakh contracts, and the 17,400 strike, where we have 48.54 lakh contracts.
Put writing was seen at 17,500 strike, which added 41.47 lakh contracts.
We have seen Put unwinding at 17,700 strike, which shed 17.37 lakh contracts, followed by 17,400 strike which shed 15.44 lakh contracts, and 17,600 strike which shed 10.61 lakh contracts.
Stocks with high delivery percentage
A high delivery percentage suggests that investors are showing interest in these stocks. The highest delivery was seen in Infosys, Alkem Laboratories, Honeywell Automation, Godrej Properties, and Power Grid Corporation of India, among others.
Rollovers
Here are the top 10 stocks which saw the highest rollovers on expiry day including HDFC Bank, Page Industries, Torrent Pharma, HDFC, and Infosys with over 98 percent rollovers.
4 stocks see a long build-up
An increase in open interest (OI) and an increase in price mostly indicate a build-up of long positions. Based on the OI percentage, 4 stocks, NMDC, Abbott India, Zydus Life Sciences, and IDFC, saw a long build-up.
110 stocks see long unwinding
A decline in OI and a decrease in price, in most cases, indicate long unwinding. Based on the OI percentage, 110 stocks including Vodafone Idea, Navin Fluorine International, Whirlpool, Sun TV Network, and LIC Housing Finance, witnessed a long unwinding.
5 stocks see a short build-up
An increase in OI accompanied by a decrease in price mostly indicate a build-up of short positions. Based on the OI percentage, 5 stocks – HDFC AMC, Asian Paints, HDFC Bank, DLF, and Zee Entertainment Enterprises – saw a short build-up.
76 stocks see short-covering
A decrease in OI along with an increase in price is an indication of short-covering. Based on the OI percentage, 17 stocks were on the short-covering list. These included Coforge, United Breweries, ONGC, InterGlobe Aviation, and Syngene International.
Bulk Deals
Investors meetings on February 24
Nazara Technologies: Officials of the company will interact with Abu Dhabi Investment Authority.
Tata Motors: The company’s officials will meet Fullerton Fund Management.
Persistent Systems: Officials of the company will interact with APG Investment.
Eicher Motors: The company’s officials will interact with Martin Currie.
Sapphire Foods India: Officials of the company will meet Julius Baer, Mondrian Investment Partners, and IIFL Capital.
Advanced Enzyme Technologies: The company’s officials will interact with TA Associates.
Alkem Laboratories: Officials of the company will interact with Schroders.
Suzlon Energy: The company’s officials will meet several investors at an event organised by UBS Securities.
Sonata Software: Officials of the company will meet analysts and investors to discuss the acquisition of Quant Systems Inc, an enterprise data analytics and cloud modernisation company.
Indian Energy Exchange: The company’s officials will interact with ITUS Capital.
Stocks in the news
Alkem Laboratories: After the inspection at Indore manufacturing facility in July 2022, USFDA issued an Establishment Inspection Report (EIR) with one observation. The company had submitted a detailed corrective and preventive action (CAPA) plan to the regulator within the stipulated timelines, for the said observation and hence accordingly the inspection has now been closed by the USFDA.
Bharat Forge: The investment committee of the company’s defence business has approved the transfer of the company’s stake in Aeron Systems, to wholly-owned subsidiary Kalyani Strategic Systems. The leading forging company has decided to house all its defense-related investments under Kalyani Strategic Systems, for a better strategic alignment.
Isgec Heavy Engineering: The company has received an order from a major steel company in eastern India for the supply of seven waste heat recovery boilers utilising waste gases from DRI sponge iron kiln. These boilers will generate steam at 125 kg/cm2(a) pressure.
KSB: The pumps and valves manufacturer announced payment of a dividend of Rs 15 per share (face value Rs 10 each up) for the financial year ended December 2022. The company recorded a 42 percent YoY growth in consolidated profit at Rs 56 crore for the quarter ended December 2022, driven by strong topline and operating performance. Revenue from operations for the quarter at Rs 524.6 crore increased by 18 percent over a year-ago period. On the operating front, EBITDA (earnings before interest, tax, depreciation and amortisation) rose by 36.2 percent YoY to Rs 76.8 crore with margin expansion of 196 bps for the quarter.
Sanofi India: The healthcare company has reported a 45 percent YoY growth in profit at Rs 130.9 crore for quarter ended December 2022, backed largely by operating performance. Revenue for the quarter fell by 2.3 percent YoY to Rs 672 crore. At the operating level, EBITDA jumped 31.2 percent to Rs 167 crore with a margin expansion of 635 bps compared to the year-ago period. The company announced a final dividend of Rs 194 per share (face value Rs 10 each) and a second special dividend of Rs 183 per share for the financial year ended December 2022.
West Coast Paper Mills: The company said the illegal strike of contract workers was called off and production at the paper and paper board division at Dandeli has been re-started. There has been marginal production loss due to the disruption of plant operations. However, during that period, the company carried out require preventive maintenance work in the plant.
Mahindra Lifespace Developers: Arvind Subramanian has resigned as Managing Director and Chief Executive Officer of the real estate developer with effect from May 22 this year, to pursue his personal interests outside the company. The company has appointed Amit Kumar Sinha as Managing Director and Chief Executive Officer, for a period of five years with effect from May 23 this year. Sinha will be Managing Director (designate) from February 23 to May 22 this year.
Nahar Industrial Enterprises: The National Company Law Tribunal’s Chandigarh bench has sanctioned the scheme of arrangement for the amalgamation of Cotton County Retail with Nahar Industrial Enterprises.