Investors should tread with caution in March as investors might want to take a directional call as to what US Federal Reserve will do in its policy meeting due later in the month.
The Nifty index today started on a muted note, witnessing selling pressure from the word go and closing with nearly 100 points lower.
The index made a ‘Bearish Belt Hold’ kind of pattern on the daily charts and closed below its crucial support placed at the 100-day exponential moving average of 10,425.
Investors should tread with caution in the month of March before taking a directional call on what the US Federal Reserve will do at its policy meeting due later this month.
A ‘Bearish Belt Hold’ pattern is formed when the opening price becomes the highest point of the trading day (intraday high) and the index declines throughout the trading day making up for the large body. The candle will either have a small or no upper shadow and small lower shadow.
In Monday’s price action, Nifty opened at 10,428 and rose marginally to 10,428.70. The bears took control of D-Street in morning trade and pushed the index below the 100 DMA.
The Nifty slipped to an intraday low of 10,323 before closing 99 points lower at 10,358.85. But, after falling for three out of four trading sessions, there is a higher probability of a technical bounceback in this week.
“Albeit Nifty appears to have breached its 100 Day Moving Average as it registered Bearish Belt Hold kind of formation the larger picture on Nifty is still that of a consolidation in nature, in the 300-point range of 10630-10300 levels,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“Beak down below the moving averages inside consolidation bands have less significance as they often tend to whipsaw without providing clear-cut buy/sell signals. Besides, the stability of the markets post-lunch session for more than 2 hours is hinting at a pullback, maybe towards upper end of consolidation range which is placed around 10,630 kind of levels as both bulls and bears will have equal balance of power inside consolidation phases till the range gets broken in either of the directions,” he said.
Mohammad further added that owing to any strong negative global cues, if the index breaches the 10,300-level on closing basis, then traders should prepare to undergo some more pain as the index heads towards 10,000 levels.
Besides, as Bank Nifty made a new swing low and registered Doji kind of indecisive formation after testing 200-Days Moving Average with a positive divergence should also strengthen the case for a 100-150 Nifty point upmove in next couple of trading sessions, suggest experts.
India VIX moved up sharply by 9.42% at 15.39. Spike in volatility after the decline of last three weeks has given an upper hand to bears and now it has to go below 13 to get some stability near to recent support zones.
The Nifty has been consolidating between 10276 to 10637 zones from last 18 trading sessions and forming a contradicting pattern which is generally a sign of sideways momentum with limited upside.
We have collated the top 15 data points to help you spot profitable trade:
Key Support and Resistance Level for Nifty:
The Nifty closed at 10,358.8. According to Pivot charts, the key support level is placed at 10,312.24, followed by 10,265.67. If the index starts to move higher, key resistance levels to watch out are 10,417.04 and 10,475.27.
Nifty Bank:
The Nifty Bank closed at 24,818.7. Important Pivot level, which will act as crucial support for the index, is placed at 24,709.43, followed by 24,600.17. On the upside, key resistance levels are placed at 24,900.53, followed by 24,982.37.
Call Options Data:
In open interest, 10,700 has seen most call writing, at 54.75 lakh contracts. This could act as a crucial resistance level for the index in the March series.
The second-highest build-up has taken place at strike price 10,500, which has seen 40.60 lakh contracts. 10,600 strike price has accumulated 35.70 lakh contracts in open interest.
Call writing was seen at a strike price of 10,400, which saw the addition of 20.97 lakh contracts, followed by 10,700, which added 11.26 lakh contracts and 10,600, which added 6.21 lakh contracts.
Call unwinding was seen at the strike price 10,800, which shed 9.41 lakh contracts.
Put Options Data:
Maximum put open interest of 35.92 lakh contracts was seen at strike price 10,400, which will act as a crucial base for the index in March series; followed by 10,000, which now holds 33.77 lakh contracts and 10,300 which has now accumulated 30.45 lakh contracts in open interest.
Put Writing was seen at the strike price of 10,100, which saw addition of 6.18 lakh contracts, along with 10,200, which added 4.77 lakh contracts and 9,800, which added 3.48 lakh contracts.
Put unwinding was seen at the strike price of 10,500, which shed 5.75 lakh contracts, followed by 10,300, which shed 4.28 lakh contracts and 10,600, which shed 1.16 lakh contracts.
FII & DII Data:
Foreign Institutional Investors (FIIs) sold shares worth Rs 366.6 crore, while domestic institutional investors sold shares worth Rs 154.2 crore in the Indian equity market, as per provisional data available on the NSE.
Fund Flow Picture:
Stocks with high delivery percentage:
High delivery percentage suggests that investors are accepting the delivery of the stock, which means that investors are bullish on it.
29 stocks saw long build-up:
4 stocks saw short covering:
A decrease in open interest along with an increase in price mostly indicates short covering.
164 stocks saw short build-up:
An increase in open interest along with a decrease in price mostly indicates short positions being built up.
14 stocks saw long unwinding:
Long unwinding happens when there is a decrease in OI as well as in price.
Bulk Deals:
BSE Limited: IDFC Imperial Equity Fund/Focus bought 6,54,000 shares at Rs 799.99 per share and IDFC Sterling Equity Fund bought 4,00,000 shares at Rs 799.99 while Nomura Asst. Mgt.Sing.Ltd. Astro Trust Series Triceratops Fun sold 13,89,657 shares at Rs 799.99 per share.
Energy Development Company: Kanodia Stock Broking bought 5,68,663 shares at Rs 22.77 per share.
Fortis Healthcare Limited: BNP Paribas Arbitrage bought 37,50,000 shares at Rs 155.28 per share.
Jindal Cotex Ltd: Aabula Investment Fund Ltd sold 14,30,000 shares at Rs 7 per share
(For more bulk deals click here)
Analyst or Board Meet/Briefings:
Astral: The management met representatives from DSP BlackRock Investment Managers.
Crompton: Kotak Securities, Progress India Opportunities Fund, Cooper Investors, Asset Management One Company, and Foyston, Canada will be interacting with the management between March 6 and March 15, 2018.
Cummins: Axis Mutual Fund, Principal India, Jefferies India, JM Financial, PBL & Dalal Broacha is meeting the management between March 6 and March 13, 2018.
Tata Steel: Blackrock International, TIAA CREF Investment Management and FI investors will be meeting the management between March 7 and March 13, 2018.
NCL India: A meeting of Board of Directors of the company is scheduled to be held on March 19, 2018, to consider declaration of interim dividend, if any, for the financial year 2017-18.
Stocks in news:
Infosys: Stock incentives in the form of Restricted Stock Units were granted to certain Key Managerial Personnel and other eligible employees under the 2015 Stock Incentive Compensation Plan by the Board/Nomination and Remuneration Committee. The date of grant for these stock incentives is February 27, 2018 and the exercise price will be the par value of shares.
Bank of Baroda: Keeps 1-year MCLR unchanged at 8.3 percent from March 7.
Essar Steel: Committee of Creditors’ meeting deferred due to indecision on eligibility of bids.
Axis Bank: RBI imposes Rs 3 crore monetary penalty for non-compliance of IRAC norms
Indian Overseas Bank: RBI imposes Rs 2 crore monetary penalty for non-compliance of KYC norms
4 stocks under ban period on NSE
Security in ban period for the next trade date under the F&O segment includes companies in which the security has crossed 95 percent of the market-wide position limit.
Securities which are banned for trading include names such as Fortis, HDIL, IDBI and Oriental Bank of Commerce.
