Trade setup for Wednesday: Top 15 things to know before the opening bell

The relentless buying continued for the third day in a row as the benchmark indices saw a gap-up opening and gained one percent, backed by momentum across sectors and positive global cues, on October 18. The indices advanced around three percent in three straight sessions.

The BSE Sensex rallied 550 points to 58,961, while the Nifty50 jumped 175 points to 17,487, the highest closing level since September 22 and formed a small-bodied bullish candle on the daily charts.

“On the daily timeframe, the Nifty gave breakout from its 16 days range where it had moved in a lacklustre way, while at the same time also sustaining above 20 days SMA (simple moving average) which acted as a variable resistance for the prices,” Vidnyan Sawant, AVP – Technical Research at GEPL Capital said.

The momentum indicator RSI (relative strength index) is sustaining above 50 levels and has started to form Higher High, Higher Low which is in sync with the trend. This reflects the rising momentum in the prices.

As per the overall chart pattern and indicator set-up, the market expert feels that the Nifty will move in a broader range of 17,150-17,650 levels for the short to medium term.

The broader markets also joined the bull run with the Nifty Midcap 100 index rising 1.1 percent and Smallcap 100 index up 0.8 percent on positive breadth, while the volatility index India VIX dropped by 5.23 percent to 17.45 levels, making the bulls more comfortable.

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

Note: The open interest (OI) and volume data of stocks in this article are the aggregates of three-month data, and not just of the current month.

Key support and resistance levels on the Nifty

As per the pivot charts, the key support level for the Nifty is placed at 17,447, followed by 17,425 & 17,389. If the index moves up, the key resistance levels to watch out for are 17,519 followed by 17,541 and 17,577.

Nifty Bank

The Nifty Bank climbed nearly 400 points to 40,319, and formed a small-bodied bullish candle on the daily scale on October 18. The important pivot level, which will act as crucial support for the index, is placed at 40,185, followed by 40,115 and 40,003 levels. On the upside, key resistance levels are placed at 40,411 followed by 40,481 & 40,593 levels.

CALL OPTION DATA

Maximum Call open interest of 45.18 lakh contracts was seen at 18,000 strike, which can act as a crucial resistance level in the October series.

This is followed by 17,500 strike, which holds 31.98 lakh contracts, and 17,700 strike, which has 17.55 lakh contracts.

Call writing was seen at 17,500 strike, which added 6.05 lakh contracts, followed by 17,700 strike which added 4.58 lakh contracts, and 17,800 strike which added 3.51 lakh contracts.

Call unwinding was seen at 17,300 strike, which shed 11.58 lakh contracts, followed by 17,200 strike which shed 7.11 lakh contracts and 17,000 strike which shed 2.41 lakh contracts.

PUT OPTION DATA

Maximum Put open interest of 37.67 lakh contracts was seen at 17,000 strike, which can act as a crucial support level in the October series.

This is followed by 16,500 strike, which holds 29.42 lakh contracts, and 16,000 strike, which has accumulated 25.34 lakh contracts.

Put writing was seen at 17,500 strike, which added 10.53 lakh contracts, followed by 17,400 strike, which added 8.18 lakh contracts, and 16,500 strike which added 2.94 lakh contracts.

Put unwinding was seen at 16,200 strike, which shed 6.76 lakh contracts, followed by 16,000 strike which shed 6.31 lakh contracts and 16,300 strike which shed 4.61 lakh contracts.

STOCKS WITH A HIGH DELIVERY PERCENTAGE

A high delivery percentage suggests that investors are showing interest in these stocks. The highest delivery was seen in NTPC, ICICI Lombard General Insurance, HDFC, ITC, and Ipca Laboratories, among others.

98 stocks saw long build-up

An increase in open interest, along with an increase in price, mostly indicates a build-up of long positions. Based on the open interest future percentage, here are the top 10 stocks including BHEL, IndiaMART InterMESH, Gujarat Gas, TVS Motor Company, and Honeywell Automation, in which a long build-up was seen.

11 stocks saw long unwinding

A decline in open interest, along with a decrease in price, mostly indicates a long unwinding. Based on the open interest future percentage, here are the top 10 stocks including Aarti Industries, Bajaj Auto, India Cements, Sun Pharmaceutical Industries, and Delta Corp, in which a long unwinding was seen.

23 stocks saw short build-up

An increase in open interest, along with a decrease in price, mostly indicates a build-up of short positions. Based on the open interest future percentage, here are the top 10 stocks in which a short build-up was seen including Samvardhana Motherson International, Navin Fluorine International, HDFC, Gujarat State Petronet, and Tech Mahindra.

65 stocks witnessed short-covering

A decrease in open interest, along with an increase in price, mostly indicates a short-covering. Based on the open interest future percentage, here are the top 10 stocks, in which a short-covering was seen including Can Fin Homes, Nifty, Infosys, Tata Motors, and Bank Nifty.

Bulk Deals

Zee Entertainment Enterprises: Nomura India Investment Fund Mother Fund acquired 62.46 lakh equity shares (0.65 percent stake) in the company at an average price of Rs 263.7 per share. However, OFI Global China Fund LLC offloaded 4.82 crore shares or 5 percent stake in the company at the same price and mopped up Rs 1,272 crore.

Samvardhana Motherson International: Japan-based Sojitz Corporation has sold 12.8 crore equity shares in the auto ancillary company at an average price of Rs 64.53 per share, and mobilised Rs 826 crore.

(For more bulk deals, click here)

Results on October 19

IndusInd Bank, UltraTech Cement, HDFC Asset Management Company, Nestle India, 5paisa Capital, AU Small Finance Bank, CG Power and Industrial Solutions, Havells India, Home First Finance Company India, Inox Leisure, Metro Brands, Max Financial Services, Nippon Life India Asset Management, Navin Fluorine International, Persistent Systems, Shoppers Stop, and Syngene International will be in focus ahead of September FY23 quarter earnings on October 19.

Stocks in News

L&T Technology Services: The company recorded a 23 percent year-on-year growth in consolidated profit at Rs 283.2 crore for the quarter ended September FY23, supported by strong topline growth. Revenue increased by 24 percent YoY to Rs 1,995 crore in Q2FY23, with deal wins at $60 million plus. Revenue in dollar terms increased by 13.6 percent YoY to $247.1 million and revenue growth in constant currency was 18 percent YoY.

Praj Industries: The company registered a massive 44.4 percent year-on-year growth in consolidated profit at Rs 48.13 crore for the quarter ended September FY23, backed by healthy topline and operating income growth. Revenue grew by 64.64 percent to Rs 876.6 crore compared to the corresponding period last fiscal.

ICICI Lombard General Insurance Company: The company reported a 32 percent year-on-year growth in profit after tax at Rs 590.5 crore for Q2FY23. Net premium earned jumped 18 percent to Rs 3,836.55 crore compared to the corresponding period last fiscal. The company has declared an interim dividend of Rs 4.50 per share for the financial year ended March 2023.

Tinplate Company of India: The company posted a loss of Rs 35.1 crore for Q2FY23, against a profit of Rs 75 crore in the year-ago period impacted by an increase in inventories and other expenses and lower topline. Revenue declined nearly 2 percent YoY to Rs 959.55 crore for the quarter ended September FY23.

Adani Enterprises: Adani Defence & Aerospace, a subsidiary of Adani Group, has decided to acquire Air Works for an enterprise value of Rs 400 crore. Adani Defence Systems & Technologies has signed definitive agreements for the acquisition of Air Works, the biggest and highly diversified independent MRO with the largest pan-India network presence across 27 cities.

Network 18 Media and Investments: Network18 reported a 12 percent year-on-year rise in its consolidated operating revenue for the quarter ended September 2022 driven by its entertainment vertical. Consolidated operating revenue for Q2FY23 was Rs 1,549 crore and that for Q2FY22 was Rs 1,387 crore, according to a statement released by the company. Revenue growth continued to be impeded by macro factors, impacting profitability, the statement said. The network’s consolidated operating EBITDA decreased by 87 percent YoY to Rs 32 crore in Q2FY23 from Rs 253 crore in Q2FY22.

Mahindra CIE Automotive: The auto ancillary company has recorded a 3 percent year-on-year growth in consolidated profit at Rs 171.4 crore for the quarter ended September FY23 supported by topline and other income, but dented by higher tax cost. Revenue grew by 30 percent to Rs 2,723 crore compared to the corresponding period last fiscal.

Fund Flow

FII and DII data

Foreign institutional investors (FIIs) have net sold shares worth Rs 153.40 crore, whereas domestic institutional investors (DIIs) net bought shares worth Rs 2,084.71 crore on October 18, as per provisional data available on the NSE.

Stocks under F&O ban on NSE

Five stocks – BHEL, Delta Corp, Indiabulls Housing Finance, India Cements, and Zee Entertainment Enterprises – are under the NSE F&O ban list for October 19. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95 percent of the market-wide position limit.

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