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

Bears had kept tight control over Dalal Street for a third consecutive session on September 16, pulling the benchmark indices down by nearly 2 percent as expectations of aggressive policy tightening by the US Federal Reserve in upcoming policy meetings to tame inflation, rising US dollar & bond yields, FII selling and correction in IT stocks weighed down the market.

The BSE Sensex fell nearly 1,100 points to 58,841, while the Nifty50 plunged nearly 350 points to 17,531 and formed bearish candlestick pattern on the daily charts. If one sees the trade of last three days, there was Dark Cloud Cover pattern formation, indicating further bearishness in the market.

“The momentum indicator RSI (relative strength index) is turning down and placed just below 60 mark which shows that the positive momentum has weakened,” said Vidnyan Sawant, AVP – Technical Research at GEPL Capital.

The Nifty has immediate resistance levels placed at 17,861 (gap resistance) followed by 18,000 (key resistance) and on the other side, it has strong support level placed at 17,480 (multiple touch points) followed by 17,380 (Gap support).

As per the overall chart pattern and indicator set up, Sawant feels that the Nifty will consolidate in the broader range of 17,861 – 17,380 for the short term.

The broader markets also succumbed to selling pressure, with the Nifty Midcap 100 index falling nearly 3 percent and Smallcap 100 index declining 2.6 percent.

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 17,412, followed by 17,293. If the index moves up, the key resistance levels to watch out for are 17,735 and 17,939.

Nifty Bank

The Nifty Bank also extended losses, declining 432 points to 40,777 and formed bearish candle on the daily charts on Friday. The important pivot level, which will act as crucial support for the index, is placed at 40,465, followed by 40,153. On the upside, key resistance levels are placed at 41,125 and 41,474 levels.

CALL OPTION DATA

Maximum Call open interest of 30.65 lakh contracts was seen at 18,000 strike, which will act as a crucial resistance level in the September series.

This is followed by 18,500 strike, which holds 21.49 lakh contracts, and 19,000 strike, which has 19 lakh contracts.

Call writing was seen at 17,700 strike, which added 6.92 lakh contracts, followed by 17,800 strike which added 4.15 lakh contracts, and 17,600 strike which added 3.97 lakh contracts.

Call unwinding was seen at 18,800 strike, which shed 4.76 lakh contracts, followed by 18,900 strike which shed 1.24 lakh contracts, and 19,000 strike which shed 1.21 lakh contracts.

PUT OPTION DATA

Maximum Put open interest of 35.72 lakh contracts was seen at 16,500 strike, which will act as a crucial support level in the September series.

This is followed by 17,500 strike, which holds 29.25 lakh contracts, and 17,000 strike, which has accumulated 28.21 lakh contracts.

Put writing was seen at 17,600 strike, which added 5.63 lakh contracts, followed by 16,500 strike, which added 3 lakh contracts, and 17,200 strike which added 2.37 lakh contracts.

Put unwinding was seen at 18,000 strike, which shed 4.9 lakh contracts, followed by 17,900 strike which shed 3.43 lakh contracts, and 18,100 strike, which shed 1.82 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 Crompton Greaves Consumer Electricals, United Breweries, Power Grid Corporation of India, Bharti Airtel, and Larsen & Toubro, among others.

1 stock 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, the one stock – Delta Corp – in which a long build-up was seen.

111 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 Vedanta, ACC, Coromandel International, ONGC, and Bank Nifty, in which long unwinding was seen.

79 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, the top 10 stocks in which a short build-up was seen include India Cements, Muthoot Finance, UltraTech Cement, Cholamandalam Investment, and Honeywell Automation.

4 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, the 4 stocks – in which short-covering was seen include IndusInd Bank, Max Financial Services, Bharat Electronics, and Cipla.

Bulk Deals

Aptus Value Housing Finance, Asahi India Glass, Lemon Tree Hotels, Motherson Sumi Wiring India: Singapore-based investment company Integrated Core Strategies (Asia) Pte Ltd sold 26,52,173 equity shares in Aptus Value Housing Finance at an average price of Rs 326.74 per share, offloaded 15,80,220 shares in Asahi India Glass at an average price of Rs 603.61 per share, sold 52,28,379 equity shares in Lemon Tree Hotels at an average price of Rs 81.74 per share, and sold 1,67,94,202 shares in Motherson Sumi Wiring India at an average price of Rs 86.54 per share.

Deepak Fertilisers: US-based investment advisory firm The Vanguard Group Inc through Vanguard Emerging Markets Stock Index Fund A Series of V I E I F bought 6,88,921 equity shares in the company at an average price of Rs 890.23 per share, however, Singapore-based investment company Integrated Core Strategies (Asia) Pte Ltd sold 7,53,298 equity shares in the company at an average price of Rs 887.69 per share.

Elgi Equipments: US-based investment advisory firm The Vanguard Group Inc through Vanguard Total International Stock Index Fund (P8) bought 27,29,411 equity shares, and Vanguard Emerging Markets Stock Index Fund A Series of V I E I F acquired 28,09,639 equity shares in the company at an average price of Rs 489.2 per share. However, Singapore-based investment company Integrated Core Strategies (Asia) Pte Ltd offloaded 27,57,923 shares at an average price of Rs 490.64 per share.

GHCL: US-based investment advisory firm The Vanguard Group Inc through Vanguard Emerging Markets Stock Index Fund A Series of V I E I F acquired 5,61,350 shares and Vanguard Total International Stock Index Fund (P8) bought 5,77,494 shares in the company at an average price of Rs 671.12 per share. However, Singapore-based investment company Integrated Core Strategies (Asia) Pte Ltd sold 6,67,116 shares in the company at an average price of Rs 667.67 per share.

(For more bulk deals, click here)

Investors Meetings on September 19

V-Guard Industries: Officials of the company will meet SBI MF, Canara Robeco, ICICI Prudential MF, and Sundaram MF.

Mahindra & Mahindra, Prince Pipes and Fittings, Max Healthcare Institute, ONGC, Radico Khaitan, Grasim Industries, Tata Steel, Lemon Tree Hotels, Piramal Enterprises, MedPlus Health Services, Macrotech Developers, IDFC First Bank, Ajanta Pharma, Tech Mahindra, Info Edge, Godawari Power & Ispat, BLS International Services, Steel Strips Wheels: Officials of the companies will attend Motilal Oswal 18th Annual Global Investor Conference, 2022.

Praj Industries: Officials of the company will meet Kotak Securities.

Tega Industries: Officials of the company will meet B&K Securities, Omkara Capital, and AlfAccurate Advisors.

Royal Orchid Hotels: Officials of the company will interact with Ananta Capital.

Ajmera Realty & Infra India: Officials of the company will meet Ambit Capital, ICICI Securities, Kotak Securities, Seraphic Management and Advisory, Edelweiss Financial Services, Yes Securities, Value Educator, Lucky Investment Managers, Geojit Financial Services, Param Capital, and Reliance Securities.

Globus Spirits: Officials of the company will meet Prabhudas Lilladher PMS.

Meghmani Finechem: Officials of the company will meet HDFC Asset Management.

Axis Bank: Officials of the bank will attend Equirus Virtual Annual Conference.

Stocks in News

Adani Power: The company has announced withdrawal of its delisting offer. Its shareholders had approved the delisting of company’s shares on the BSE and NSE in July 2020, and had submitted application for approval for the delisting to the exchanges in January 2021. However, the company has not received in principle approval of the exchanges, due to which it is withdrawing offer for delisting on account of delay and commercial viability.

ACC, Ambuja Cements: The Adani Group, through its special purpose vehicle Endeavour Trade and Investment, has completed the acquisition of Ambuja Cements & ACC. With this, it has become the second largest cement player in India. The transaction involved the acquisition of Holcim’s stake in Ambuja and ACC along with an open offer in both entities. The value of the Holcim stake and open offer consideration for Ambuja Cements and ACC is $6.50 billion. Soon after Adani’s takeover, the two cement firms announced the resignation of their board of directors, including the CEOs and CFOs. The board of Ambuja Cements approved an infusion of Rs 20,000 crore into Ambuja by way of preferential allotment of warrants.

Indus Towers: Bimal Dayal has tendered his resignation as Managing Director & CEO of the company and as a Director from the Board. Till the time the aforesaid vacancy is filled, Tejinder Kalra, the Chief Operating Officer and Vikas Poddar, the Chief Financial Officer will be jointly responsible for the functioning of the company under the guidance of the board and the Chairman.

Tata Power: Resurgent Power Ventures Pte Ltd completed acquisition of South East UP Power Transmission Company (SEUPPTCL). Resurgent Power Ventures Pte Ltd is a joint venture based out of Singapore, wherein 26 percent shareholding is held by Tata Power through its wholly owned Singapore based subsidiary. SEUPPTCL was incorporated as a special purpose vehicle formed by UP Power Transmission Company Limited (UPPTCL) in 2009 to implement and operate the specified intra-state transmission system for a period of 35 years under public private partnership model on build-own-operate-maintain & transfer (BOOT) basis. Now, SEUPPTCL has become a wholly owned subsidiary of Resurgent Power.

SAL Steel: The company is going to supply ferro chrome to AIA Engineering. For the same, it has entered into a supply agreement for 3 years with AIA Engineering on a non-exclusive basis, while AIA Engineering has also agreed to provide a secured inter corporate deposit of Rs 125 crore to the company which will be used by the company to repay its loan or for working capital requirements.

Granules India: The company has decided to open its share buyback offer on September 27 and the offer will close on October 11. The company will buy back shares worth up to Rs 250 crore and the buyback price has been fixed at Rs 400 per share.

HDFC Life Insurance Company: The company has received approval from National Company Law Tribunal for merger of Exide Life Insurance Company with itself.

Fund Flow

FII and DII data

Foreign institutional investors (FIIs) have net sold shares worth Rs 3,260.05 crore, while domestic institutional investors (DIIs) net offloaded shares worth Rs 36.57 crore on September 16, as per provisional data available on the NSE.

Stocks under F&O ban on NSE

Four stocks – Indiabulls Housing Finance, India Cements, PVR, and RBL Bank – are under the NSE F&O ban list for September 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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