Investors are advised to remain cautious and watch trading activity carefully over the next few sessions
After two days of decline and a fall below crucial short-term moving average, the Nifty managed to bounce back on Wednesday and close above its crucial resistance level of 10,770, making a 'Harami' pattern on the daily charts.
A 'Bullish Harami' candlestick pattern is formed when a large red candle is followed by a smaller white or a green candle. On Tuesday, we saw the Nifty forming a 'Bearish Belt Hold' pattern, which has negative implications.
Formation of a bullish candle after a large bearish candle suggests that the trend may be reversing. The smaller candle is usually located within the vertical range of the larger body.
However, the pattern will only get confirmed if the bullishness continues in Thursday's trade as well. The Nifty should sustain above 10,700 for the bulls to remain in control.
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Investors are advised to remain cautious and watch trading activity carefully over the next few sessions. A slip below 10,698 could result in the downtrend resuming, while a close above 10,840 could tilt the trend upward.
The Nifty, which opened at 10,734, rose to an intraday high of 10,781 on Wednesday. It slipped marginally to hit an intraday low of 10,724, before ending the day at 10,772, up 61 points.
"Wednesday's bullish candle appears to have resulted in 'Harami' kind of formation pointing towards possible short-term reversal of the trend in favour of bulls once again. However, to confirm this kind of strength market need to witness not only a follow- through buying but also fill and sustain above the bearish gap present in the zone of 10833 – 842 on 14th of June," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.
"Unless that happens bears shall continue to have upper hand against bulls. Essentially alternate day strength among bulls and bears is suggesting that market is undecided about the direction and stuck up in a range," he said.
Mohammad added that if the bulls can successfully defend 10,700 on Thursday, they may be able to push the index towards 10,840, thereby tilting the balance in their favour.
"Contrary to this if bears succeed in pushing the Nifty below 10,698 levels then down trend shall once again resume with more strength," he said.
The Bank Nifty erased the losses made over the last three sessions and closed above its immediate hurdle of 26,500. It formed a strong bullish candle after the weakness of the last four sessions, and now it has to hold above 26,500 to witness an up move towards 26,750, suggest experts.
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 10,772.0 on Wednesday. According to Pivot charts, the key support level is placed at 10,736.73, followed by 10,701.47. If the index starts moving upwards, key resistance levels to watch out are 10,794.53 and 10,817.07.
Nifty Bank
The Nifty Bank index closed at 26,557.7 on Wednesday. The important Pivot level, which will act as crucial support for the index, is placed at 26,386.8, followed by 26,215.9. On the upside, key resistance levels are placed at 26,651.71, followed by 26,745.7.
Call options data
Maximum call open interest (OI) of 49.50 lakh contracts was at the 11,000 strike price, which will act as a crucial resistance level for the index in the June series.
This was followed by the 10,800 strike price, which now holds 39.05 lakh contracts in open interest, and 10,900, which has accumulated 37.77 lakh contracts in open interest.
There was hardly any call writing seen.
Call unwinding was seen at the 10,800 strike price, which shed 3.94 lakh contracts; followed by the 11,000 strike price, which shed 3.88 lakh contracts and the 10,500 strike price, which shed 1.72 lakh contracts.
Put options data
Maximum put open interest of 56.97 lakh contracts was seen at the 10,700 strike price, which will act as a crucial base for the index in June series.
This was followed by the 10,600 strike price, which now holds 45.63 lakh contracts in open interest, and the 10,200 strike price, which has now accumulated 30.38 lakh contracts in open interest.
Put writing was seen at the 10,700 strike price, which added 8.95 lakh contracts; followed by the 10,800 strike price, which added 4.14 lakh contracts.
Put unwinding was seen at the strike price of 10,500, which shed 1.7 lakh contracts; followed by the 10,400 strike price, which shed 1.47 lakh contracts and the 10,200 strike price, which shed 1.15 lakh contracts.
FII & DII data
Foreign institutional investors (FIIs) sold shares worth Rs 2442.61 crore, while domestic institutional investors bought shares worth Rs 1,473.65 crore in the Indian equity market on Thursday, 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.
120 stocks saw long buildup
23 stocks saw short covering
A decrease in open interest along with an increase in price mostly indicates short covering.
62 stocks saw short build-up
An increase in open interest along with a decrease in price mostly indicates build-up of short positions.
2 stocks saw long unwinding
Bulk Deals:
Gitanjali Gems: BP Fintrade Private Limited bought 13,00,012 shares at Rs 4.30 per share
H.G.Infra Engineering: Smeaton Developers bought 5,00,000 shares at Rs 289.02 per share
Suumaya Lifestyle: Jackpot Vintrade bought 2,80,000 shares at Rs 18.39 per share
(For more bulk deals, click here)
Analyst or Board Meet/Briefings:
Narayana Health: The company met B&K Securities on June 20, 2018.
HealthCare Global: Multiple investors met the company on June 18, 2018.
Stocks in news:
Adani Transmission: Company acquires 100 percent equity in Ghatampur SPV
Bosch: Company plans to invest Rs 1,700 crore in India in next 3 years
L&T: Company opposes proposal to give Rs 60,000-crore submarine project to Mazagon Dock
Jet Airways: Company inducts first of 150 Boeing 737 Max planes
Tata Steel: Company starts despatch of Tiscrome from Gopalpur plant
BHEL: Company bags Rs 1,000 crore orders from Telangana
Blue Dart: Company sets up aviation hub at Chennai airport
Interglobe Aviation: Compant says it has not received any summons from ED
4 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 June 21, 2018, DHFL, Jet Airways, Infibeam and JP Associates are present in this list.