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Thursday, March 23, 2023

Trade setup for Wednesday: Top 14 things to know before the opening bell

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The global cues-led selling pressure sustained for the fourth straight session with the benchmark indices falling around six-tenth of a percent on March 14. Most sectors, barring pharma, were caught in a bear trap.

The benchmark indices hit a fresh five-month closing low. The BSE Sensex fell 338 points to 57,900, while the Nifty50 dropped 111 points to 17,043 and formed a bearish candlestick pattern on the daily charts.

For the last four days, the Nifty has been pricing in the US banking crisis and an impending rate hike of 25–50 basis points. “On the lower end, the index neared the lower band of the falling channel,” Rupak De, Senior Technical Analyst at LKP Securities said.

Going forward, he says 16,950 will likely act as crucial support for the index. Only a breakdown below 16,950 may trigger a further correction. On the higher end, resistance is visible at 17,150-17,200, the expert said.

The broader markets also extended the downtrend for yet another session with the Nifty Midcap 100 and Smallcap 100 indices declining 0.5 percent and 0.83 percent respectively, on weak breadth.

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We have collated 14 data points to help you spot profitable trades:

Note: The open interest (OI) and volume data of stocks in this article are the aggregates of three-month data and not just the current month.

Key support and resistance levels on the Nifty

As per the pivot charts, the Nifty has support at 16,994, followed by 16,938 and 16,847. If the index moves up, the key resistance levels to watch out for are 17,176, followed by 17,232 and 17,323.

Nifty Bank

The Bank Nifty continued to reel under pressure but the fall was less compared to previous sessions. The index declined 153 points to 39,411, and formed a small-bodied bearish candle on the daily scale with long upper and lower shadows, indicating the fight between bulls and bears.

The index has been making lower highs and lower lows for the third straight session.

“The Bank Nifty continued to witness selling pressure from higher levels and tested the support zone of 39,500-39,400. The index, if it manages to hold the level of 39,400, can witness some pullback rally towards 40,000,” Kunal Shah, Senior Technical Analyst at LKP Securities, said.

The important pivot level, which will act as a support, is at 39,195, followed by 39,044 and 38,802. On the upside, key resistance levels are 39,680, followed by 39,830, and 40,073.

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Call option data

On a weekly basis, the maximum Call open interest (OI) was seen at 17,500 strike, with 1.07 crore contracts, which is expected to be a crucial hurdle on the higher side for the Nifty in the coming sessions.

This is followed by an 18,000 strike, comprising 1.03 crore contracts, and a 17,700 strike, where there are more than 90.69 lakh contracts.

Call writing was seen at 17,200 strike, which added 41.79 lakh contracts, followed by 17,100 strike, which gave an addition of 29.39 lakh contracts, and 17,000 strike which saw 19.01 lakh contracts addition.

We have seen Call unwinding at 17,900 strike, which shed 27.85 lakh contracts, followed by 18,100 strike which shed 7.03 lakh contracts, and 18,200 strike which shed 5.99 lakh contracts.

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Put option data

On a weekly basis, we have seen the maximum Put OI at 17,000 strike, with 58.26 lakh contracts, which is expected to act as a crucial support zone for the Nifty50 in coming sessions.

This is followed by the 16,800 strike, comprising 53.25 lakh contracts, and the 16,500 strike, where we have 42.83 lakh contracts.

Put writing was seen at 16,800 strike, which added 15.95 lakh contracts, followed by 17,000 strike with 12.89 lakh contracts, and 16,600 strike with 12.48 lakh contracts.

We have seen Put unwinding at 17,400 strike, which shed 6.51 lakh contracts, followed by 17,200 strike which shed 5.68 lakh contracts, and 17,300 strike which shed 5.12 lakh contracts.

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Stocks with high delivery percentage

A high delivery percentage suggests that investors are showing interest in these stocks. The highest delivery was seen in Info Edge, Glenmark Pharma, Syngene International, TCS, and Hindustan Unilever, among others.

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42 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, 42 stocks including Cummins India, MCX India, Bosch, PI Industries, and Dr Lal PathLabs witnessed a long build-up.

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46 stocks see long unwinding

In most cases, a decline in OI and a decrease in price indicate a long unwinding. Based on the OI percentage, 46 stocks including Balrampur Chini Mills, Torrent Power, HCL Technologies, Firstsource Solutions, and PFC witnessed a long unwinding.

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59 stocks see a short build-up

An increase in OI accompanied by a decrease in price mostly indicates a build-up of short positions. Based on the OI percentage, 59 stocks including Aditya Birla Fashion, Intellect Design Arena, Mphasis, RBL Bank, and Persistent Systems, saw a short build-up.Image81432023

45 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, 45 stocks were on the short-covering list. These included Larsen & Toubro, Dalmia Bharat, BPCL, M&M Financial Services, and NALCO.

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Bulk Deals

Divgi Torqtransfer Systems: Quant Mutual Fund acquired 2.63 lakh shares in the auto ancillary company via open market transactions at an average price of Rs 588.87 per share, and Sageone Investment Managers LLP bought 3.6 lakh shares at an average price of Rs 597.59 per share. However, Morgan Stanley Asia (Singapore) Pte sold 3.73 lakh shares at an average price of Rs 590.32 per share.

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(For more bulk deals, click here)

Investors’ meetings on March 15

Allcargo Logistics: Officials of the company will meet investors and analysts in a non-deal roadshow organised by Jefferies.

Infosys: The company’s officials will participate in HDFC Securities IT sector Conference.

HCL Technologies: Officials of the company will participate in a non-deal roadshow in the US, hosted by Jefferies.

Kotak Mahindra Bank: The bank’s officials will be meeting investors at Morgan Stanley India Financials Investor Group Trip in Mumbai.

Safari Industries: Officials of the company will interact with Sundaram Mutual Fund, DSP Mutual Fund, Motilal Oswal Asset Management Company, Invesco Asset Management (India), LIC Mutual Fund, Alchemy Capital Management, Ambit Capital, and Goldman Sachs Asset Management.

ICICI Bank: The bank’s officials will participate in Morgan Stanley India Financials Investor Group Trip.

Crompton Greaves Consumer Electricals: Officials of the company will interact with Emkay Global, and Genesis Investment Management, London.

Meghmani Finechem: The company’s officials will meet Quantum Securities.

Krsnaa Diagnostics: Officials of the company will interact with Aditya Birla Sun Life Insurance Company, Tata Mutual Fund, and ICICI Prudential Mutual Fund.

Stocks in the news

Cipla: The pharma major and its subsidiaries, Cipla (EU), UK and Meditab Holdings, Mauritius, have entered into a Share Purchase Agreement with Africa Capitalworks SSA 3, for the sale of 51.18 percent stake in Cipla Quality Chemical Industries (CQCIL), Uganda. After the stake sale, CQCIL will cease to be a subsidiary of the company. The stake sale process is expected to be completed by May 2023 and they will get a consideration in the range of $25-30 million.

DFM Foods: The company has received a delisting order, approving the delisting of equity shares from BSE and National Stock Exchange of India. Accordingly, the trading in the equity shares of the company will be discontinued from both the exchanges with effect from March 28 this year. Further, the company will be delisted from exchanges with effect from April 5. The exit option will be kept open by the promoter or acquirer of the company i.e. Al Global Investments (Cyprus) PCC along with Al Darwin (Cayman) for the remaining public shareholders for a period of at least one year from the date of delisting at the rate of Rs 467 per share, being the exit price determined.

RailTel Corporation of India: The company has received a work order worth Rs 287.57 crore from Centre for Development of Advanced Computing (C-DAC). The work includes supply, installation, integration, testing and commissioning of IT infrastructure in green field data centres in New Delhi and Bengaluru along with training and support.

LIC Housing Finance: MR Kumar has resigned as Chairman [Non-Executive (Nominee) Director] from the board of LIC Housing Finance. He tendered the resignation after the attainment of superannuation from the services of Life Insurance Corporation of India with effect from March 13.

PNC Infratech: The company has been declared L1 (lowest) bidder in a National Highways Authority of India’s (NHAI) highway project for the construction of the 6-lane Greenfield Varanasi-Ranchi-Kolkata Highway under Bharatmala Pariyojana in Bihar on Hybrid Annuity Mode. The project bid cost is Rs 1,260 crore. The said project is expected to be constructed in 24 months and operated for 15 years, after construction.

TVS Motor Company: The company has received board approval for the allotment of 12,500 non-convertible debentures of face value Rs 1 lakh each, amounting to Rs 125 crore, through private placement. The date of maturity of these NCDs will be March 13, 2026.

Elgi Equipments: The company’s wholly owned subsidiary Elgi Compressors USA Inc has acquired a 33.33 percent stake in CS Industrial Services LLC. CS Industrial Services will act as an exclusive dealer or distributor for Elgi Compressors USA Inc, for the sale of ELGi branded compressors in the western New York region.

Texmaco Rail & Engineering: The company has received board approval for the transfer of rail EPC business via slump sale to its wholly owned subsidiaries. Its rail EPC business comprises two undertakings – Kalindee Rail and Bright Power. Both units will be transferred to its two subsidiaries, Texmaco Rail Electrification and the other is to be incorporated.

Fund Flow

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FII and DII data

Foreign institutional investors (FII) sold shares worth Rs 3,086.96 crore, whereas domestic institutional investors (DII) bought shares worth Rs 2,121.94 crore on March 14, the National Stock Exchange’s provisional data showed.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.





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