The trend for Nifty continues to remain positive in the short-term, however, heavy profit booking from the highs could change the trend.
On the downside, supports are holding near 11650 levels, which shows that the bulls are inherently in control.
Domestic benchmark indices, now at their pre-pandemic highs, could now be sitting on shaky grounds. S&P BSE Sensex gained for the sixth consecutive session on Thursday along with the 50-stock Nifty. However, technical analysts say that a small negative candle was formed with minor upper and lower shadow on the charts during yesterday’s session. “Technically, this market action could indicate a formation of a doji type pattern at the swing high of 11905. This could be crucial for bulls to sustain the highs,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. He added that any weakness in the stock market is expected to open profit booking in the market from the highs.
For the October series, maximum Call open interest (OI) is placed at 12,500 strike with 20.01 lakh contracts, followed by 12,000 strike with 19.74 lakh contracts. The 12,500 strike added 1.94 lakh contracts yesterday. Put OI was maximum at 10,500 strike with 35/28 lakh contracts, followed by 11,000 strike with 24.55 lakh contracts. “Technically, with the index above the 11794 levels indicates a bullish signal for the market and exhibits strength for the index to rally beyond 12000 levels. However with the market being overstretched, in the short term, a minor correction can’t be ruled out, but that would be an opportunity for investors to create long positions between 11700 and 11650 levels. One needs to keep a stop loss at 11500 for the same,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.
Support and resistance levels: The trend for Nifty continues to remain positive in the short-term, however, heavy profit booking from the highs could change the trend. “The next overhead resistance to be watched at 12000 levels and immediate support is placed at 11740,” said Nagaraj Shetti.
Global cues: SGX Nifty was up 24 points on Friday morning. Equity markets in the United States again ended in the green. In Asian markets, Shanghai Composite, opening after the holiday week, was up over 1% during early trade while Hang Seng was flat. TOPIX and Nikkei 225 were trading with losses while stock markets in South Korea were up with gains.
FII and DII trends: Foreign Institutional Investors (FII) were net buyers of domestic securities for the fifth day straight, and were this time accompanied by Domestic Institutional Investors (DII). FIIs bought stocks with Rs 978 crore on Thursday while DIIs bought equities worth Rs 19.85 crore. FIIs also bought Index Futures worth Rs 1,398 crore and Index options worth Rs 1,711 crore.
Bulk and Block deals: Ascent India Fund III sold 3.41 lakh shares of Solara Active Pharma yesterday. Authum Investment & Infrastructure Limited sold 2.5 lakh shares of LKP Finance while a similar quantity was picked up Nishil Surendrabhai Marfatia.
MPC meet ends today: After a delay, the six member monetary and credit policy committee started its first meeting on October 7 and will end today. The MPC could maintain the low rates and an accommodative stance.