February 28, 2024
The big gap-up opening, which remained unfilled till the closing on November 4 while taking the Nifty50 to a new historic high, continued the higher highs and higher lows formation on the daily charts indicating that the momentum is expected to be strong going ahead.

The Nifty50 seems to be eyeing the psychological 21,000 mark with support at 20,500 in coming sessions, said experts.

On November 4, the benchmark indices ended at a fresh record closing high with the BSE Sensex surging 1,384 points or 2.05 percent to 68,865, while the Nifty50 climbed 419 points or 2.07 percent to 20,687, the biggest single-day gain since October 4, 2022. The index has formed a bullish candlestick pattern with a long lower shadow on the daily scale, indicating buying at lower levels.

“Technically, this pattern indicates strong upside momentum and a decisive upside breakout of the previous top at 20,200 levels. Though Nifty placed at the highs, still there is no indication of any reversal pattern unfolding at the new highs,” Nagaraj Shetti, technical research analyst, HDFC Securities said.

He feels the next upside levels to be watched are around 20,900 levels, which is a 61.8 percent Fibonacci extension (taken from the March bottom, September top, and October bottom-weekly chart). “Immediate supports are placed around 20,500 and 20,290 levels,” he said.

Vinay Rajani, CMT, senior technical and derivative analyst at HDFC Securities believes that Nifty is in continuation of an uptrend and dips should be utilized to accumulate longs.

The broader markets also participated in the run-up but underperformed benchmarks, as the Nifty Midcap 100 and Smallcap 100 indices gained 1.2 percent and 1.4 percent, respectively.

We have collated 15 data points to help you spot profitable trades:

Key support and resistance levels on the Nifty

The pivot point calculator indicates that the Nifty is likely to see immediate resistance at 20,707 followed by 20,753 and 20,827, while on the lower side, it can take support at 20,558 followed by 20,512 and 20,438 levels.

Nifty Bank

On December 4, the Bank Nifty played the biggest role in today’s new high posted by the benchmark index Nifty50, as the banking index itself also saw a gap-up opening and ended at a record closing high of 46,431, up 3.61 percent. The index has formed a strong bullish candlestick pattern on the daily charts with healthy volumes.

“We expect the momentum to continue. On the upside, 47,000-47,200 shall be the immediate short-term target,” Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.

Any dip towards 46,200-46,000 should be used as a buying opportunity, he advised.

As per the pivot point calculator, the index is expected to see resistance at 46,515, followed by 46,751 and 47,134, while on the lower side, it may take support at 45,751, followed by 45,515 and 45,133.

Call options data

On the weekly options data front, the supports and resistances continued to shift higher given the benchmark Nifty hitting a new record high. The 21,000 strike owned the maximum Call open interest (OI) with 65.98 lakh contracts, which can act as a key resistance level for the Nifty. It was followed by the 21,500 strike, which had 57.10 lakh contracts, while the 20,700 strike had 56.33 lakh contracts.

Meaningful Call writing was seen at the 21,500 strike, which added 30.08 lakh contracts followed by 21,200 and 20,700 strikes, which added 24.16 lakh and 24.05 lakh contracts.

The maximum Call unwinding was at the 20,400 strike, which shed 32.81 lakh contracts followed by 20,500 and 20,300 strikes, which shed 20.64 lakh and 20.32 lakh contracts.

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Put option data

On the Put front, the 20,500 strike has the maximum open interest, which can act as a key support area for the Nifty, with 74.99 lakh contracts. It was followed by 20,000 strike comprising 72.94 lakh contracts and 20,600 strike with 63.85 lakh contracts.

Meaningful Put writing was at 20,500 strike, which added 70.59 lakh contracts followed by 20,600 strike and 20,400 strike, which added 62.64 lakh contracts and 34.67 lakh contracts.

Put unwinding was at 19,500 strike, which shed 17.19 lakh contracts followed by 19,000 strike, which shed 11.94 lakh contracts and 20,100 strike which shed 8.35 lakh contracts.

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Stocks with high delivery percentage

A high delivery percentage suggests that investors are showing interest in the stock. Power Grid Corporation of India, JK Cement, Apollo Hospitals Enterprise, Reliance Industries and United Spirits saw the highest delivery among the F&O stocks.

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81 stocks see a long build-up

A long build-up was seen in 81 stocks, which included Ramco Cements, ONGC, India Cements, Federal Bank and Oberoi Realty. An increase in open interest (OI) and price indicates a build-up of long positions.

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10 stocks see long unwinding

Based on the OI percentage, 10 stocks saw long unwinding, including Delta Corp, Coforge, Maruti Suzuki India, Balkrishna Industries and Dr Reddy’s Laboratories. A decline in OI and price indicates long unwinding.

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22 stocks see a short build-up

A short build-up was seen in 22 stocks, which were Ashok Leyland, Zee Entertainment Enterprises, Glenmark Pharma, Abbott India and Granules India. An increase in OI along with a fall in price points to a build-up of short positions.

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71 stocks see short-covering

Based on the OI percentage, 71 stocks were on the short-covering list. These include Dixon Technologies, Apollo Hospitals Enterprise, REC, State Bank of India and ACC. A decrease in OI along with a price increase is an indication of short-covering.

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PCR

The Nifty Put Call ratio (PCR), which indicates the mood of the equity market, climbed further to 1.39 on December 4, from 1.3 in the previous session. An above 1 PCR indicates that the traders are buying more Put options than Calls, which generally indicates an increase in bearish sentiment.

Bulk deals

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For more bulk deals, click here

Stocks in the news

HCL Technologies: HCL Investments UK, the step-down wholly-owned subsidiary of HCL Technologies, has entered into a Memorandum of Understanding with its joint venture (JV) partner, State Street International Holdings, for selling the entire 49 percent equity stake in the JV to State Street for $170 million + net book value.

Honasa Consumer: Fireside Ventures is going to sell 61 lakh shares of Honasa Consumer, the parent company of beauty and personal care products brand Mamaearth, in a block deal on December 5, sources told CNBC Awaaz. This is a 1.9 percent stake in the company worth more than Rs 230 crore as of the last closing price.

Mahindra & Mahindra Financial Services: The non-banking finance company estimated the overall disbursement at approximately Rs 5,300 crore in November, delivering a 16 percent growth over the previous year. The disbursements for April-November 2023 at about Rs 36,000 crore registered a growth of 16 percent YoY.

JSW Infrastructure: The company said its subsidiary JSW Dharamtar has entered into a share purchase agreement to purchase 50 percent plus 1 shares of PNP Maritime Services held by SP Port Maintenance, a Shapoorji Pallonji group company, for Rs 270 crore.

SEPC: The company has received work orders worth Rs 427.8 crore from the Drinking Water and Sanitation Department of the government of Jharkhand.

Bank of India: The public sector lender is likely to launch a qualified institutional placement (QIP) issue in the range of Rs 3,500-4,000 crore this week, reports CNBC-TV18 quoting sources.

Funds Flow (Rs Crore)

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FII and DII data

Foreign institutional investors (FIIs) bought shares worth Rs 2,073.21 crore, while domestic institutional investors (DIIs) purchased Rs 4,797.15 crore worth of stocks on December 4, provisional data from the National Stock Exchange (NSE) showed.

Stock under F&O ban on NSE

The NSE has added Indiabulls Housing Finance, India Cements and Zee Entertainment Enterprises to its F&O ban list for December 5, while retaining Delta Corp to the said list.

Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.

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