The index stayed above its crucial support of 10,400 but most technical experts feel that the momentum is stalling and investors should trade with a strict stoploss below 10,350 for all long positions.
The Nifty which started on a muted note dipped below key support levels in intraday trade on Wednesday before bulls took control and pushed the index above 10,400 levels for the second consecutive day in a row.
The index formed a ‘Hanging Man’ like pattern on the daily candlestick charts which is a bullish reversal pattern. The index bounced back after touching its short-term moving average (5-DEMA) placed at 10,360.
A Hammer consists of no upper shadow, a small body, and long lower shadow. The long lower shadow of the Hammer signifies that it tested its support where demand was located and then bounced back.
The index stayed above its crucial support of 10,400 points but most technical experts feel that the momentum is stalling and investors should trade with a strict stoploss below 10,350 for all long positions.
Bears took control of the Nifty soon after opening bell as the intraday high level of the Nifty was the same. The index opened at 10,428.15 and slipped to touch its intraday low of 10,355 before closing the day at 10,417 up 14.90 points.
“The Nifty closed the day on a cautionary note as it registered Hanging Man kind of formation after Tuesday’s Doji kind of indecisive pattern. Usually Hanging Man formation is visible around the short-term turning points suggesting exhaustion in the ongoing upmove,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“In line with this pattern, today’s advance-decline ratio was skewed in favour of bears as more number of stocks declined than a number of scrips which closed in positive terrain. Besides momentum oscillators on short-term charts are in overbought zones with no apparent sell signals on short-term charts,” he said.
Mohammad advises traders to remain cautiously optimistic and look for a breakout above 50 Day Simple Moving Average, whose value is placed around 10,425, on closing basis.
“Once the said average is decisively conquered then this leg of uptrend can get extended itself towards 10600 kind of levels. On the downsides, the level of 10350 shall be assumed to be a sacrosanct support and a close below the said level shall enhance selling pressure,” he said.
India VIX moved up 1.52 percent at 14.72. VIX has to remain between 13.50-13 zone to start the fresh leg of up move in the market.
We have collated the top 15 data points to help you spot profitable trades:
Key support and resistance level for Nifty
The Nifty closed at 10,417.2 on Wednesday. According to Pivot charts, the key support level is placed at 10,372.47, followed by 10,327.73. If the index starts moving upwards, key resistance levels to watch out are 10,445.07 and 10,472.93.
Nifty Bank
The Nifty Bank index closed at 25,098.2. The important Pivot level, which will act as crucial support for the index, is placed at 24,963.29, followed by 24,828.4. On the upside, key resistance levels are placed at 25,220.09, followed by 25,342.0.
Call Options data
In terms of open interest, the 10,500 call option has seen the most call writing so far at 43.83 lakh contracts. This could act as a crucial resistance level for the index in the April series.
The second-highest buildup has taken place in the 10,600 Call option, which has seen 38.45 lakh contracts getting written so far. The 11,000 Call option has accumulated 37.87 lakh contracts.
Call writing was seen at the strike price of 10,600, which added 8.18 lakh contracts, followed by 10,600, which added 1.13 lakh contracts, and 10,400, which added 3.56 lakh contracts, and 10,500, which added 2.17 lakh contracts.
Call unwinding was seen at the strike price of 10,700, which shed 11.23 lakh contracts.
Put Options data
Maximum open interest in put options was seen at a strike price of 10,000, in which 45.74 lakh contracts been added till date. This could be a crucial resistance level for the index in April series.
The 10,300 put option comes next, having added 43.54 lakh contracts so far, and the 10,200 put option, which has now accumulated 41.33 lakh contracts.
During the session, put writing was seen the most at a strike price of 10,400, with 6.9 lakh contracts being added, followed by 10,300, which added 4.77 lakh contracts and 10,200 with 2.09 lakh contracts.
Put unwinding was seen at the strike price of 10,100, which shed 2.37 lakh contracts.
FII & DII data:
Foreign institutional investors (FIIs) bought shares worth Rs 362.3 crore, while domestic institutional investors bought shares worth Rs 111.82 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 delivery of the stock, which means that investors are bullish on it.
62 stocks saw long buildup
35 stocks saw short covering:
A decrease in open interest along with an increase in price mostly indicates short covering.
72 stocks saw short build-up:
An increase in open interest along with a decrease in price mostly indicates build-up of short positions.
41 stocks saw long unwinding
Bulk Deals:
DLF: Rajdhani Investments bought 92 lakh shares at Rs 215.25 apiece.
Rajiv Singh sold 92 lakh shares at Rs 215.25 apiece.
JP Associates: Adroit Share and Stock Broker traded over 1.37 crore shares at Rs 21.05 apiece.
Mahanagar Gas: BG Asia Pacific Holdings sold 31.89 lakh shares and 42.18 lakh shares in two deals at 905.83 and Rs 905.27 apiece, respectively.
(For more bulk deals click here)
Analyst or Board Meet/Briefings:
Persistent Systems: The company will hold an analyst call on April 24, 2018.
Equitas: Motilal Oswal AMC met the management on April 10, 2018.
Stocks in news:
Jet Airways: It has appointed Ashok Chawla as non-executive independent director of the Board.
GMR: The group will set up aerospace & defence manufacturing hub in Tamil Nadu
Oil companies: Major agreement has been signed between Saudi Aramco & Hindustan Oil, Indian Oil & Bharat Oil.
Bhushan Steel: NCLT reserves orders on resolution plan approval
Biocon: Mylan and Biocon have sought to accelerate introduction of Adalimumab Biosimilar In EU.
Tata Motors: Global wholesales at 1.53 lakh units in March.
L&T: It has signed an MoU With BEL To Develop Defence Products
Tata Sons: The company will Form Tata Aerospace & Defence
IDBI Bank: RBI Imposes Rs 3 crore penalty for non-compliance with IRAC Norms.
3 stocks under ban period on NSE
Security in ban period for the next day's trade under the F&O segment includes companies in which the security has crossed 95 percent of the market-wide position limit.
For April 12, 2018 Jet Airways, Balrampur Chini and JP Associates are present in this list.