Experts advise investors to remain cautious as bulls failed to reclaim crucial resistance levels even after strong rally seen in two back-to-back trading sessions.
The Nifty50 which with a gap down managed to recoup a majority of its losses and closed flat with slight negative bias on Friday. It made a bullish candle on the daily charts on an intraday basis and a ‘Long Legged Doji’ kind of pattern on the weekly charts.
A typical long-legged Doji pattern is formed when the opening price is almost equal to the closing price but there was a lot of intraday movement on either side.
The Nifty50 opened the week at 10,765.95 on Monday and closed at 10,767 on Friday. But, it hit a low of 10,633.15 on 5 June and a high of 10,818 on Thursday.
For Friday, Nifty index opened negative but managed to hold on to its immediate support of 10,700 – 10,720 zones and recovered towards its crucial hurdle of 10,770-10,780 zones.
Technical experts advise investors to remain cautious as bulls failed to reclaim crucial resistance levels even after strong rally seen in two back-to-back trading sessions. It is crucial for bulls to reclaim 10,818 levels which was the intraday high of Thursday for the momentum to continue.
“On the weekly charts, it looks that it is slowly inching up as it registered a third consecutive positive close before signing off the week with a ‘Long Legged Doji’ kind of candlestick formation suggesting indecisive nature of bulls,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“Hence, it is critical for Nifty50 to register a fresh breakout above recent highs of 10,818 levels so that bulls can confidently march ahead else they continue to remain vulnerable to a counterattack by the bears at any time,” he said.
Mohammad further added that Thursday’s gap-up opening in the zone of 10,722 – 10,698 appears to be in a critical support and a breach of which could enhance selling pressure, but for now, traders are advised to remain cautiously optimistic till a directional move unfolds going forward.
India VIX fell down by 0.65 percent at 12.69 levels. On the options front, maximum Put OI is placed at 10,600 followed by 10,500 strikes while maximum Call OI is placed at 11,000 followed by 10,800 strikes.
We have collated the top 15 data points to help you spot profitable trades:
Key Nifty support and resistance levels
The Nifty closed at 10,767.7 on Friday. According to Pivot charts, its key support is placed at 10,724.63, followed by 10,681.57. If the index starts moving upward, key resistance levels to watch out are 10,795.13 and 10,822.57.
Nifty Bank
The Nifty Bank index closed at 26,451.3. The important Pivot level, which will act as a crucial support for the index, is placed at 26,330.0, followed by 26,208.7. On the upside, key resistance levels are placed at 26,526.8, followed by 26,602.3.
Call options data
In terms of open interest, the 11,000 call option has seen the most call writing so far, with 42.68 lakh contracts being written. This level could act as a crucial resistance for the index in the June series.
The second-highest buildup was seen in the 10,800 call option, which has seen 32.25 lakh contracts getting written so far. The 10,700 call option has accumulated 30.58 lakh contracts.
The most call writing was seen at the strike price of 11,100, which saw 2.70 lakh contracts getting written, followed by 10,700, which added 2.41 lakh contracts and 10,800, which added 2.25 lakh contracts.
Put options data
Maximum open interest in put options was seen at the 10,600 strike price, in which 49.11 lakh contracts have been added till date. This level could be a crucial support for the index in the June series.
The 10,500 put option comes next, with 35.91 lakh contracts being added so far, followed by the 10,200 put option, which has now accumulated 33.47 lakh contracts.
Maximum put writing was seen at the strike prices of 10,600, which added 5.82 lakh contracts, followed by 10,700, which added 3.85 lakh contracts, and 10,400, which added 3.63 lakh contracts.
FII and DII data
Foreign institutional investors (FIIs) sold shares worth Rs 222.5 crore, while domestic institutional investors bought shares worth Rs 459.44 crore in the Indian equity market, as per provisional data available on the National Stock Exchange.
Bulk deals:
Bhushan Steel: BP Fintrade bought 22 lakh shares at Rs 34.74.
JustDial: Shaastra Securities traded over 4.5 lakh shares at Rs 562.6 apiece.
Strides Shasun: Shaastra Securities traded over 5 lakh shares at the rate of Rs 367 apiece.
Analyst or board meet/briefings:
AU Small Finance Bank: The company met multiple investors on June 8, 2018.
Axis Bank: Amansa Capital and Platinum AMC met the firm on June 8, 2018.
Cos & Kings: Karst Peak Capital met the firm on June 8, 2018.
Stocks in the news:
Natco: The company launched an injetion, which will be an antifungal agent.
Syndicate Bank: Raises One-year MCLR To 8.55% From 8.50%
Shoppers Stop: Vijay Jain Resigns As Chief Financial Officer w.e.f. June 08, 2018
Inox Wind: Auditors resign citing time constraints
TCS: Promoter Tata Sons has created a pledge 1.04% Equity On June 5
Indian Overseas Bank Raises Lending Rate By 5-10 bps Effective June 10
3 stocks under ban period on the NSE
Securities in ban period for the next day’s trade under the futures and options segment includes companies in which the security has crossed 95 percent of the market-wide position limit.
For June 11, Balrampur Chini, DHFL and Jet Airways are present in the F&O ban list.
