Investors who went long on Tuesday should keep a trailing stop loss below 10500
The Nifty managed to snap its 5-days losing streak on Tuesday. The index moved in a narrow range of nearly 70 points and made a small bullish candle on the daily charts which also resembles a ‘Spinning Top’ kind of pattern on charts.
Spinning Top is often regarded as a neutral pattern which suggests indecisiveness on the part of both bulls as well as bears. It can be formed in an uptrend as well as in a downtrend.
The Nifty index opened at 10,518 and slipped to an intra-day low of 10,490 but then bulls took charge and pushed the index back above 10,500. The index made an intraday high of 10,558 before closing the day 20 points higher at 10,536.
The Nifty closed below its 100-days moving average and 50-DEMA which does not augur well for the bulls. The bulls will only gain strength once Nifty closes above its 5-DEMA placed around 10,600.
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Investors who went long on Tuesday should keep a trailing stop loss below 10500. A slip below 50-DMA placed around 10,460, could extend the selling pressure, suggest experts.
“Finally, five days of continuous fall appears to have paved the way for a pullback rally as Nifty registered a small bullish candle which resembles an indecisive Spinning Top kind of candlestick formation,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.
“However, as this pull back attempt is coming from around right technical levels the probability of sustaining can be somewhat higher. Initial signs of strength can be presumed if indices manage a sustainable close above its 5-day simple moving average whose value is placed around 10,620 levels,” he said.
Mohammad further added that on a close above 10,620 a strong pullback attempt can take indices towards 10,777. On the downsides, it is imminent for the Nifty to sustain above its 50 Day Simple Moving Average whose value is placed around 10465 levels.
“Traders with high-risk appetite shall consider going long by making use of opening dip, if any, towards 10,500 levels with a stop below 10,450 on a closing basis,” he added.
India VIX fell by 5.60% at 13.60 levels. On the options front, maximum Put OI is intact at 10,500 followed by 10,000 strikes while maximum Call OI is placed at 10,800 followed by 11,000 strikes.
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 10,536.7 on Tuesday. According to Pivot charts, the key support level is placed at 10,498.6, followed by 10,460.5. If the index starts moving upwards, key resistance levels to watch out are 10,566.7 and 10,596.7.
Nifty Bank
The Nifty Bank index closed at 25,777.7 on Tuesday. The important Pivot level, which will act as crucial support for the index, is placed at 25,670.77, followed by 25,563.84. On the upside, key resistance levels are placed at 25,915.17, followed by 26,052.63.
Call Options data
In terms of open interest, the 10,800 Call option has seen the most call writing so far at 66.23 lakh contracts. This could act as a crucial resistance level for the index in the May series.
The second-highest buildup has taken place in the 11,000 Call option, which has seen 59.17 lakh contracts getting written so far. The 10,700 Call option has accumulated 43.73 lakh contracts.
Call writing was seen at the strike price of 10,800, which added 16.17 lakh contracts, followed by 10,500, which added 4.37 lakh contracts, and 10,700, which added 4.12 lakh contracts.
Call unwinding was seen at the strike price of 11,100, which shed 2.82 lakh contracts, followed by 10,900, which shed 1.05 lakh contracts.
Put Options data
Maximum open interest in put options was seen at a strike price of 10,500, in which 60 lakh contracts been added till date. This could be a crucial resistance level for the index in May series.
The 10,000 put option comes next, having added 33.18 lakh contracts so far, and the 10,300 put option, which has now accumulated 32.67 lakh contracts.
During the session, put writing was seen the most at a strike price of 10,500, with 5.68 lakh contracts being added, followed by 10,300, which added 2.74 lakh contracts and 10,400, which added 1.52 lakh contracts.
Put unwinding was seen at a strike price of 10,600, in which 2.08 lakh contracts were shed.
FII & DII data:
Foreign institutional investors (FIIs) sold shares worth Rs 1,651.63 crore, while domestic institutional investors bought shares worth 1,496.83 crore in the Indian equity market on Tuesday, 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.
67 stocks saw long buildup
79 stocks saw short covering:
A decrease in open interest along with an increase in price mostly indicates short covering.
39 stocks saw short build-up:
An increase in open interest along with a decrease in price mostly indicates build-up of short positions.
22 stocks saw long unwinding
Bulk Deals:
GSS Infotech Limited: Real Marketing Pvt Ltd sold 2,13,063 shares at Rs 87.88 per share
Strides Shasun Limited: BNP Paribas Arbitrage bought 4,85,282 shares at Rs 365.25 per share while Brookdale Mauritius International Ltd bought 10,05,000 shares at Rs 375.27 per share
(For more bulk deals, )
Analyst or Board Meet/Briefings:
Advanced Enzymes: The firm will be meeting multiple investors on May 23 and 24, 2018.
Apar Industries: The company will have an earnings call on May 31, 2018.
Stocks in news:
HPCL Q4 net profit down 10.4% at Rs 1,747.9 crore, revenue up 5.8% at Rs 60,801 crore, QoQ
Minda Industries: The firm allotted equity shares of around1,10,000 shares and hence will boost.
Cipla: The firm reported a net profit of Rs 153.8 crore.
Sonata Software: Profit for the March quarter has grown 10 percent at Rs 54.3 crore.
State Bank of India to sell 3-5 percent stake in general insurance JV in FY19
GE Power India Q4 net up 32 percent at Rs 51.55 crore
CCI approves Bayer-Monsanto deal
Fortis Healthcare: Sebi probes insider trading violation, other regulatory lapses
5 stocks under ban period on NSE
Securities 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 May 23, 2018, BEML, DHFL, Jet Airways, Just Dial, and Reliance Communications are present in this list.