The Nifty just about managed to hold on to 22,000 at the start of this truncated week. The optimist would see it as a recovery from the day's low but the skeptic will see it as the index still continuing to face resistance at the 22,100 mark.
Although the Nifty managed to respect its 50-Day Moving Average (DMA) levels around 21,950 on the downside, which is where it reversed on Tuesday after opening at those levels. In what was expected to be a rangebound, low volume day, the Nifty traded in a 125-point range.
However, the index heavyweights continued to put pressure in what was otherwise a tepid trading session. Reliance Industries, HDFC Bank and ICICI Bank, contributed to nearly two-thirds or 64% of the 92-point drop that the Nifty had on Tuesday. Only L&T and Bajaj Finance could offset some of the losses inflicted upon by the heavyweights.
Stock | Point Contribution |
HDFC Bank | -28.4 |
Reliance Industries | -21.2 |
ICICI Bank | -11.3 |
L&T | 13.9 |
Bajaj Finance | 9.7 |
Despite the broader markets outperforming the benchmarks on Tuesday, the Advance-Decline ratio remained skewed towards the losers as for every one stock that advanced, there were 1.6 stocks that ended with losses.
The consolidation may continue with increased volatility over the next two sessions due to the lack of directional cues both domestically and globally. Once the financial year ends, companies will start reporting their quarterly business updated, followed by earnings reports from the second week of April.
Both foreign and domestic investors were net buyers in the cash market on Tuesday. The numbers through, are skewed due to the block deals seen in stocks like Mankind Pharma, SBI, and others.
The market is currently undergoing a phase of consolidation and the 50-DMA level of 21,950 will be the key support level for the Nifty, said Shrikant Chouhan of Kotak Securities. Till it remains above the 50-DMA, it has the change to move back towards 22,150 - 22,200 levels. However, the selling pressure can accelerate towards 21,800 - 21,750 in case the Nifty fails to hold the 50-DMA, he added.
Rajesh Bhosale of Angel One said that the Nifty is oscillating in the range between its 50-Day Moving Average and its 20-Day Moving Average and only a breakout from that range will dictate the next directional move. Immediate support levels are between 21,900 - 21,850, while 21,700 further down is a major support. Upside resistance is between 22,200 - 22,250 levels.
When ICICI Bank and HDFC Bank are putting pressure, it is only certain that the Nifty Bank will turn out to be an underperformer. The two-day recovery had taken the index closer to 47,000 but it again faced resistance at the 46,800 mark. With Tuesday's drop, the Nifty Bank also gave up some of the gains made during the March F&O series.
Immediate resistance for the Nifty Bank is at 47,000 levels, and a decisive close above that level will trigger a sharp short-covering towards the 48,000 mark. Support on the downside remains at 46,500 - 46,450 mark and a break below that can accelerate the index's fall towards the 46,000 mark.
The 50-DMA placed around levels of 47,000 will continue to act as a formidable resistance for the Nifty Bank, said Om Mehra of SAMCO Securities. Support lies at 46,300 and a break below that trigger further selling pressure towards levels of 46,000, he said.
What Are The F&O Cues Indicating?
Nifty 50's futures across series shed 2% in Open Interest on Tuesday. Current rollovers for the Nifty futures are at 49%. They are now trading at a premium of 83.85 points from 68.7 points earlier. On the other hand, Nifty Bank's futures across series added 1.3% in Open Interest on Tuesday. Their current rollovers are at 76%. Nifty 50's Put-Call Ratio is at 1.09 from 1.23 earlier.
SAIL is now the only stock that remains in the F&O ban, while Zee Entertainment, Biocon and Tata Chemicals are out of the ban.
Nifty 50 on the Call side for March 28 expiry:
On the Call side, Nifty 50's strikes between 22,000 and 22,300 have seen Open Interest addition for this Thursday's expiry.
Strike | OI Change | Premium |
22,100 | 26.72 Lakh Added | 88.45 |
22,200 | 25.87 Lakh Added | 43.95 |
22,300 | 22.18 Lakh Added | 17.9 |
22,000 | 6.6 Lakh Added | 150.9 |
Nifty 50 on the Put side for March 28 expiry:
On the Put side, the Nifty 50 strikes between 21,700 and 22,000 have seen Open Interest addition for this Thursday's expiry.
Strike | OI Change | Premium |
21,900 | 10.8 Lakh Added | 36.5 |
21,700 | 22.77 Lakh Added | 11.55 |
21,950 | 9.47 Lakh Added | 47.6 |
22,000 | 4.91 Lakh Added | 61.1 |
These stocks saw addition of fresh long positions on Tuesday, meaning an increase in both price and Open Interest:
Stock | Price Change | OI Change |
Max Financial Services | 4.11% | 23.98% |
Aurobindo Pharma | 3.00% | 19.85% |
Larsen & Toubro | 1.38% | 19.82% |
Shree Cement | 1.54% | 19.56% |
Manappuram Finance | 1.04% | 16.83% |
These stocks saw additions of fresh shorts on Tuesday, meaning a decline in price but increase in Open Interest:
Stock | Price Change | OI Change |
Dabur | -0.05% | 26.71% |
Info Edge | -0.41% | 26.10% |
SBI Life Insurance | -0.95% | 22.81% |
ICICI Lombard | -0.79% | 17.82% |
Dalmia Bharat | -0.13% | 17.56% |
Short covering was seen in these names on Tuesday, meaning an increase in price but decline in Open Interest:
Stock | Price Change | OI Change |
Laurus Labs | 0.38% | -31.18% |
Navin Fluorine | 0.66% | -26.58% |
PNB | 1.30% | -22.39% |
Havells India | 1.42% | -19.11% |
Apollo Tyres | 0.78% | -18.57% |
Unwinding of long positions was seen in these stocks on Tuesday, meaning a decline in both price and Open Interest:
Stock | Price Change | OI Change |
Coromandel International | -0.34% | -24.19% |
Wipro | -0.97% | -22.04% |
UPL | -1.01% | -20.80% |
Bata India | -0.43% | -20.13% |
RBL Bank | -0.84% | -18.14% |
These are the stocks to watch out for ahead of Wednesday's trading session:
First Published: Mar 26, 2024 7:05 PM IST
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