Which way will Nifty 50 lean in the battle of bulls vs bears?


If you look at Monday’s closing levels on Nifty 50, you might wonder if the market had even traded on Monday. However, the index traveled sideways throughout the session, reversing from support and facing trouble at resistance zones. Fully respecting the range.

Nifty 50 closed 70 points above intraday low of 19,601 and 60 points above the day’s high of 19,734. The 130-point range demonstrated a true battle of bulls versus bears on the road at the beginning of the concluding week of the September F&O Series.

While Infosys, Reliance and TCS dragged the index down, financials led by Bajaj Finance, ICICI Bank, Kotak Bank and last week’s top loser HDFC Bank ensured that the Nifty did not fall below 50 key support levels.

What are the experts saying?

“India is headed for (and has already entered) a new upturn cycle that will last for many years. Any recovery was portrayed as the end of a cycle. The reality is that all signs point to That we are in that phase and a similar mistrust cycle persists. Unless we see a case arguing against room for a cycle, we prefer to remain buyers on any correction in the equity markets. Financial and “Capital spending stories will lead the cycle followed by a broader recovery in consumption,” Venugopal said at Bernstein’s Gare.

Ridham Desai of Morgan Stanley wrote that the opening of the sovereign bond market and the resulting inflows are likely to be beneficial for Indian equities due to the positive impact of growth. “In terms of sector priorities, we prefer financials and consumer discretionary and will avoid global materiality,” he wrote.

What do Nifty 50 charts show?

Well, Nifty 50 has barely moved beyond Friday’s levels, respecting the support at 19,600 on the downside, and facing pressure near the resistance zone of 19,750.

Nagaraj Shetty intends to view 19,580 as a key downside level for Nifty 50 as it has offered strong support for Nifty 50 in the last 3-4 months. Therefore, he expects the index to bounce higher in the near term and upside resistance will be seen at 19,850 levels.

Rupak Dey of LKP Securities said, “Nifty 50 has been volatile before closing with a Doji pattern on the daily chart. This suggests a possible pause in the current bearish trend. He expects that before starting a new trend. The market will consolidate. D believes fresh short positions only on break below 19,600 with upper resistance at 19,755.

Mehul Kothari of Anand Rathi said the 19,600 level is a make or break level for both bullish and bearish Nifty 50. Falling below this could increase selling pressure, while maintaining these levels could lead to a possible rise to 19,800.

Will Nifty Bank start moving higher?

Monday was a day of turmoil for Nifty Bank. While one can take solace from the fact that HDFC Bank, Kotak Bank and ICICI Bank ensured that the Nifty 50 remained where it was, it still could not cross the 45,000 mark, having reversed from 44,936. The index ultimately closed nearly 200 points below the day’s high but still managed to outperform the Nifty 50.

Kunal Shah of LKP Securities said the index remained below its 20-DMA despite some losses from lower levels. He expects the uptrend to resume only after Nifty Bank closes above 45,000 points. On the downside, support now lies between 44,500 – 44,000 and breach of this support range could result in additional selling pressure on the index, Shah said.

Anand Rathi’s Kothari also called 44,400 a key level for Nifty Bank, below which selling pressure may increase. The upward movement will resume only if it closes above the 45,000 mark.

Delta Corp’s growing problems

The stock of Monday’s trading session was Delta Corp., but for the wrong reasons. The stock closed 17 per cent lower on Monday after receiving GST demand notice worth nearly Rs 17,000 crore. This repeated the 23 per cent decline seen on July 12 when GST rates on casinos were raised. The stock also saw a big block deal, with 1.7 crore shares worth Rs 236 crore exchanging hands. The stock is now off the F&O ban list from today’s session.

Gurmeet Chaddha of Complete Circle told CNBC-TV 18 That he wouldn’t be “brave” and think about buying Delta Corp now. “Maybe at some point the valuations will become much cheaper but it will be a long legal battle. That’s the risk with SIN shares, regulatory interference, tax demands, it’s always a risk,” he said. Chadha mentioned ITC and United Spirits among his favorite SIN stocks.

What are the F&O signals indicating?

Open interest in September futures of Nifty 50 increased by 3.3 percent on Monday. Current rollovers stand at 34.6 percent. Futures are trading at a premium of 25.95 points compared to earlier 34 points. Open interest in Nifty Bank September futures added 6.7 per cent with the current rollover at 42 per cent. The put-call ratio of Nifty 50 is now 0.91 which was earlier 0.93.

Balrampur Sugar has entered the F&O ban list, while Delta Corp and Manappuram Finance are out of the ban period. Indiabulls Housing Finance, Hindustan Copper, Canara Bank and Granules India will remain on the sanctions list.

Nifty 50 on the call side for expiry September 28:

For this Thursday’s expiry, an increase in open interest has been seen in Nifty 50 call strikes between 19,650 and 19,900. The maximum increase in open interest has been observed at 19,700 strike.

strike oi change premium price
19,700 22.98 lakhs were added 75.05
19,650 17.74 lakhs were added 103.4
19,750 13.41 lakhs were added 51.95
19,900 9.95 lakhs were added 14

Nifty 50 on put side for expiry September 28:

On the downside, Nifty 50 put strikes have seen an increase in open interest between 19,400 and 19,600, with the maximum increase seen in the 19,400 strike.

strike oi change premium price
19,400 18.02 lakhs were added 8.2
19,500 13.28 lakhs were added 17.95
19,600 10.93 lakhs were added 38.1
19,450 10.62 lakhs were added 11.95

Let’s take a look at the stocks that saw short covering on Monday, which means an increase in price but a decrease in open interest:

store price change oi change
bata india 0.08% -20.92%
IRCTC 4.13% -17.13%
Capital 1.21% -14.74%
Ramco Cements 5.02% -12.72%
IPCA Labs 0.03% -12.46%

Let’s take a look at the stocks that had long positions liquidated on Monday, meaning a decrease in both price and open interest:

store price change oi change
zee entertainment -0.73% -53.53%
hero moto -0.95% -40.11%
Bajaj Auto -0.01% -39.40%
IndusInd Bank -0.74% -38.44%
Muthoot Finance -0.74% -37.96%

Here are the stocks to keep an eye on ahead of Tuesday’s trading session:

  • ITC: CMD Sanjeev Puri told CNBC-TV18 that the hotel business can fund its expansion for the next 2-3 years and he does not see any significant need to raise capital for the demerged business any time soon.
  • tata ispat: Moody’s has upgraded Tata Steel’s credit rating to investment grade with Baa3 issuer rating and stable outlook.
  • Sheela Foam: Raised Rs 1,194 crore through QIP issue. To allot 1,11,31,725 ​​equity shares at the issue price of Rs 1,078 per share, which is a 5 per cent discount to the floor price of Rs 1,133.99 per share.
  • Angel One: To consider September quarter earnings along with second interim dividend on October 12. The record date for dividend, if any, has been set as October 20.
  • Wipro: Building and 14.02 acre plot in Chennai sold for Rs 266.4 crore.
  • Ujjivan Small Finance Bank: Partnership with SMC Global Securities to provide online trading services to the bank’s customers. Services will include savings, demat and trading accounts.
  • Welspun Corp: It will invest up to Rs 350 crore in Telangana to set up a manufacturing unit for its subsidiary Syntex.
  • RPP Infra: Won new orders worth Rs 482 crore through letter of acceptance for projects in Tamil Nadu and Karnataka.
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