Investors are advised to stay long with a strict stop loss below 10395, and if Nifty closes above 10500 which is its key resistance level that the rally could extend towards 10630, suggest experts.
The Indian market seems to be climbing every wall of worry. On Thursday, indices closed above the crucial 50-day moving average (DMA) resistance level placed around 10420, and also the 100-DMA.
The index which took support at its 5-DEMA for the second trade in a row recorded a breakout above its crucial resistance level of 10450. It made a bullish candle on the daily candlestick charts.
However, the market breadth favoured the bears as only 582 stocks advanced with 881 stocks declining on the NSE. This triggers cautions even though the index closed above its crucial resistance level of 10,450.
Investors are advised to stay long with a strict stop loss below 10,395, and if Nifty closes above 10,500 which is its key resistance level that the rally could extend towards 10,630, suggest experts.
The index which opened at 10,410 rose to an intraday high of 10,469. It did slip marginally below 10,400 to touch its intraday low of 10,395 before closing the day at 10,458, up 41 points.
“Albeit Nifty50 registered a breakout with a decent bullish candle with a close above its 50-Day SMA, which curtailed all the pullback attempts in the past, it appears that market participants lack conviction at higher levels as market breadth remainednegative for the second day in a row with more scrips registering a close in negative terrain,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“However, technical indicators and oscillators are presenting a different picture as slowly one after the other are generating a buy signal. In Thursday’s session, daily MACD line closed above its equilibrium line triggering a fresh buy signal,” he said.
Usually, MACD being a lagging indicator such a buy signal after the rally may lead to consolidation of the market. Hence, in next session, if market rallies with wider participation that should confirm a breakout else there will be a threat of current breakoutbeing whipsawed and rally may get fizzled out.
Mohammad advises traders to remain cautious and maintain a tight stop below 10395 levels on closing basis. If the rally gets extended then it may eventually test its interim peak of 10630 levels.
India VIX fell down by 1.09 percent at 14.56. VIX has to cool down to extend its positive momentum. On the options front, maximum Put OI is at 10300 followed by 10000 strikes while maximum Call OI is at 10500 followed by 10600 strikes.
Significant Put writing at 10400 and 10300 strikes which is shifting its support to higher side while Call unwinding is seen at all immediate strike prices which is giving a scope for further upside 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 10,458.7 on Thursday. According to Pivot charts, the key support level is placed at 10,412.63, followed by 10,366.57. If the index starts moving upwards, key resistance levels to watch out are 10,487.33 and 10,515.97.
Nifty Bank
The Nifty Bank index closed at 25,195.1. The important Pivot level, which will act as crucial support for the index, is placed at 25,028.07, followed by 24,861.04. On the upside, key resistance levels are placed at 25,303.47, followed by 25,411.84.
Call Options data
In terms of open interest, the 10,600 call option has seen the most call writing so far at 39.08 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 10,500 Call option, which has seen 37.89 lakh contracts getting written so far. The 10,400 Call option has accumulated 35.53 lakh contracts.
Call writing was seen at the strike price of 10,400, which added 1.99 lakh contracts, followed by 10,700, which added 1.28 lakh contracts, and 10,600, which added 62,175 contracts.
Call unwinding was seen at the strike price of 10,500, which shed 5.94 lakh contracts, followed by 10.300, which shed 4.08 lakh contracts and 11,000, which shed 2.5 lakh contracts.
Put Options data
Maximum open interest in put options was seen at a strike price of 10,300, in which 55.40 lakh contracts been added till date. This could be a crucial resistance level for the index in April series.
The 10,000 put option comes next, having added 50.66 lakh contracts so far, and the 10,200 put option, which has now accumulated 45.77 lakh contracts.
During the session, put writing was seen the most at a strike price of 10,400, with 13.22 lakh contracts being added, followed by 10,300, which added 11.86 lakh contracts and 10,000 with 4.92 lakh contracts.
Put unwinding was seen at the strike price of 11,000, which shed 1.5 lakh contracts.
FII & DII data:
Foreign institutional investors (FIIs) bought shares worth Rs 368.9 crore, while domestic institutional investors sold shares worth Rs 615.81 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.
50 stocks saw long buildup
32 stocks saw short covering:
A decrease in open interest along with an increase in price mostly indicates short covering.
69 stocks saw short build-up:
An increase in open interest along with a decrease in price mostly indicates build-up of short positions.
59 stocks saw long unwinding
Bulk Deals:
Balrampur Chini Mills: Daily Active Emerging Markets Securities Lending Common TR sold 15,13,561 shares at Rs 74.20 per share
Kwality Limited: Letko Brosseau Emerging Markets Equity Fund bought 36,50,000 shares at Rs 59 per share while Siddhant and Sons HUF sold 15,00,000 shares at Rs 59.04 per share
(For more bulk deals click here)
Analyst or Board Meet/Briefings:
Advanced Enzymes: Singular Capital will meet the management on April 16, 2018
Dixon Technologies: ULJK Financial Services will be meeting the company on April 13, 2018.
Endurance Technologies: Fidelity AMC has scheduled a telephonic call with the company on April 13, 2018.
Stocks in news:
NBCC: The company has secured total business of Rs 770 crore for March 2018.
HAL, M&M: Boeing partners with HAL & Mahindra to manufacture F/A-18 Super Hornet in India.
State Bank of India: CBI Questions DGM Rank Officials From SBI branch In Frankfurt & Mauritius
GAIL: The firm will receive LNG cargo from Gazprom in May
Adani: The company has entered into multiple tie-ups to further defence business, Hindu Business Line reported.
IL&FS: The firm is raising USD 1 billion infrastructure fund under its PE business, Mint reported.
HUL: Appoints Sanjiv Mehta as Chairman
Infosys: The company will be declaring its results on Friday, April 13.
4 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 13, 2018 Jet Airways, Balrampur Chini, IRB, and JP Associates are present in this list.