The market started off the week on a strong note as the benchmark indices recovered all the previous day’s losses and posted more than one percent gains on May 8. Most of the key sectors including banking & financial services and auto traded higher.
The BSE Sensex rallied 710 points to 61,764, while the Nifty50 jumped 195 points to 18,264.40, the highest closing level since December 20 last year, and formed a bullish candlestick pattern on the daily charts by making a higher high and higher low formation.
“A long bull candle was formed on the daily chart, that has covered the decline of the previous session on the upside and filled the opening downside gap of Friday and closed higher. This is a positive indication and one may expect further upside in the short term,” Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.
He feels the short-term trend of Nifty remains positive. “A sustainable move above 18,300 levels is expected to pull Nifty towards the next upper area of 18,600-18,700 levels in the near term. Any failure to surpass the hurdle is likely to result in further consolidation with minor weakness,” he said.
Immediate support is at 18,100-18,050 levels, he added.
The Nifty Midcap 100 and Smallcap 100 indices also participated in the run, rising 1 percent each on positive breadth, while the volatility inched up for yet another session with the India VIX rising to 12.64 levels from 11.72 levels.
We have collated 15 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 Nifty
The pivot charts indicate that the Nifty may get support at 18,146 followed by 18,102 and 18,031. If the index advances, 18,288 is the initial key resistance level to watch out for followed by 18,333 and 18,404.
The Bank Nifty gained more than 600 points to close at 43,284, and formed a bullish candlestick pattern on the daily scale, but traded within the previous day’s range.
“The Bank Nifty bulls after Friday’s sell-off once again witnessed buying momentum and the index surpassed the level of 43,000 which will now act as support on the downside,” Kunal Shah, Senior Technical and Derivative analyst at LKP Securities said.
The immediate hurdle on the upside is placed at 43,500 and once taken out on a closing basis will witness a sharp short covering towards all-time high levels, he added.
As per the pivot point calculator, the Bank Nifty may take support at 42,917 followed by 42,766 and 42,523. Key resistance levels are expected to be 43,405 along with 43,555 and 43,799.
On the weekly options front, we have seen the maximum Call open interest (OI) at 18,500 strike, with 86.06 lakh contracts, which is expected to be a crucial resistance level for the Nifty in the coming sessions.
This was followed by 18,300 strike, comprising 81.89 lakh contracts, and 18,200 strike, with more than 72.1 lakh contracts.
Call writing was seen at 18,500 strike, which added 28.78 lakh contracts, followed by 18,400 strike, which added 11.44 lakh contracts, and 19,000 strike which added 5.85 lakh contracts.
Call unwinding was at 18,100 strike, which shed 46.04 lakh contracts, followed by 18,200 strike, which shed 45.08 lakh contracts, and 19,100 strike, which shed 34.97 lakh contracts.
The maximum Put open interest was at 18,200 strike with 1.09 crore contracts, which is expected to act as an important support level in the coming sessions.
This was followed by the 18,100 strike, comprising 78.26 lakh contracts, and the 18,000 strike where we have 72.26 lakh contracts.
Put writing was seen at 18,200 strike, which added 47.64 lakh contracts, followed by 18,300 strike, which added 26.98 lakh contracts, and 18,000 strike, which added 26.88 lakh contracts.
We have seen Put unwinding at 17,800 strike, which shed 7.79 lakh contracts, followed by 17,900 strike, which shed 4.56 lakh contracts, and 17,300 strike, which shed 1.48 lakh contracts.
A high delivery percentage suggests that investors are showing interest in the stock. The highest delivery was seen in SRF, Grasim Industries, Sun Pharmaceutical Industries, Tata Communications and Infosys among others.
An increase in open interest (OI) and price typically indicates a build-up of long positions. Based on the OI percentage, 84 stocks, including Oracle Financial, Marico, BHEL, ONGC and Federal Bank saw long build-ups.
A decline in OI and price generally indicates a long unwinding. Based on the OI percentage, 5 stocks – United Breweries, Havells India, MRF, Larsen & Toubro and Dr Reddy’s Laboratories – saw a long unwinding.
An increase in OI along with a price decrease indicates a build-up of short positions. Based on the OI percentage, 22 stocks, including Aditya Birla Fashion & Retail, Dr Lal PathLabs, Polycab India, Canara Bank and Tata Communications saw a short build-up.
A decrease in OI along with a price increase is an indication of short-covering. Based on the OI percentage, 79 stocks were on the short-covering list. These included Escorts, Shriram Finance, National Aluminium Company, Bharat Forge and Vedanta.
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Lupin, Raymond, Reliance Infrastructure, Apollo Tyres, Birla Corporation, Castrol India, Chalet Hotels, Eveready Industries India, Godrej Agrovet, Hatsun Agro Product, Indraprastha Gas, JM Financial, KSB, Latent View Analytics, Matrimony.com, Nazara Technologies, Nuvoco Vistas Corporation, Rain Industries, Shipping Corporation of India, SRF, Suven Life Sciences and Westlife Foodworld will be in focus ahead of quarterly earnings on May 9.
Stocks in the news
Mahanagar Gas: The natural gas distribution company has recorded a 56.2 percent quarter-on-quarter growth in profit at Rs 268.81 crore for the March FY23 quarter, driven by healthy operating performance. Revenue fell 3.6 percent sequentially to Rs 1,610.5 crore, with volumes declining 1.16 percent QoQ. Numbers, barring topline, were above estimates. The company announced a final dividend of Rs 16 per equity share.
Andhra Paper: The paper and pulp manufacturer has clocked a 168 percent year-on-year growth in profit at Rs 153.9 crore for the quarter ended March FY23, driven by healthy topline and operating numbers. Revenue from operations grew by 38.55 percent to Rs 590 crore compared to the year-ago period.
Carborundum Universal: The Murugappa Group company has recorded a 140.4 percent year-on-year growth in consolidated profit at Rs 137.1 crore for March FY23 quarter on strong operating and topline numbers. Revenue increased by 38 percent to Rs 1,199.6 crore compared to the same period last year with good growth in all segments including abrasives, ceramics and electro minerals. The company announced a final dividend of Rs 2 per share for FY23.
VIP Industries: The luggage and bags manufacturer has posted a net loss of Rs 4.3 crore in the March FY23 quarter, against a profit of Rs 12.4 crore in the same period last year. The company had an exceptional loss of Rs 47.21 crore relating to a loss of property, plant and equipment and inventories that were destroyed due to a major fire at a plant of a Bangladesh subsidiary in Q4FY23. Revenue grew by 27 percent YoY to Rs 450.6 crore.
Godrej Consumer Products: Godrej Consumer has completed the acquisition of the FMCG business of Raymond Consumer Care. On April 27, the company announced the proposed acquisition of the FMCG business of Raymond Consumer Care by way of a slump sale. RCCL is a leading player in the deodorants and sexual wellness categories in India.
Pidilite Industries: The adhesive manufacturing company has recorded an 11.3 percent year-on-year growth in consolidated profit at Rs 283.03 crore for the quarter ended March FY23 on good operating numbers, Revenue from operations rose 7.3 percent to Rs 2,689.25 crore in the same period.
Foreign institutional investors (FII) bought shares worth Rs 2,123.76 crore, while domestic institutional investors (DII) purchased shares worth Rs 245.27 crore on May 8, provisional data from the National Stock Exchange showed.
Stocks under F&O ban on NSE
The National Stock Exchange added BHEL and retained GNFC and Manappuram Finance to its F&O ban list for May 9. 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.
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