The Nifty formed a Shooting Star kind of pattern on daily charts on Wednesday which suggests that the market could have reached an intermediate top.
A strong day for Indian markets; however, the momentum did fizzle out towards the close of the trade. Nifty did climb its 200-DMA placed at 10,744 but failed to close above the same which suggest pressure at higher levels.
The final tally – the S&P BSE Sensex rose 203 points while the Nifty50 rallied 43 points to close at 10,728.
Sectorally, IT stocks led the rally on D-Street with Infosys and TCS rallying by over 4 percent each. On the losing front, Oil & Gas, Realty, and Telecom index were down by 1-3 percent respectively.
Volatility cannot be ruled out being the expiry day. The expiry should ideally happen in the range of 10500-10800 levels.
Banking and Infra have gained momentum and are expected to outperform going ahead. Experts see some resistance at 10900-11000 levels from where a meaningful correction towards 10400-10500 cannot be ruled out.
Rupee rises 17 paise to 70.62 on easing crude prices
Foreign investors bought Rs 961 crore in Indian Capital Markets while DII sold Rs 330 crore on Wednesday, according to provisional data.
Big News:
Well, markets are expected to remain volatile today and investors should watch for last hour volatility that is seen on the expiry day. Nifty Rollovers towards December series stand at 49 percent.
Anecdotal evidence based on last 10 expiry months in 2018 suggest that bears have taken control over D-St on the expiry day.
The Nifty index closed in red in 7 out of last 10 expiry months. Maximum fall of 0.98 percent was seen in October followed by 0.69 percent drop seen in September and March.
On the upside, bulls were only able to take control in just 3 out of 10 expiry months. Maximum gain was seen in May when Nifty rallied by 1.5 percent followed by 0.45 percent gain in April and 0.32 percent upmove seen in July.
Stocks in news:
Tata Consultancy Services on November 28 bought BridgePoint Group LLC, a US management consulting firm catering to the financial services industry, and specializing in retirement services.
Yes Bank which fell by 11 percent on Wednesday clarified that it has no business dealings with the two Rana Kapoor-promoted investment firms that have come under regulatory and investor lens.
Piramal Enterprises on Wednesday said it plans to raise up to Rs500 crore through issue of secured non-convertible debentures (NCDs) on private placement basis.
Technical View:
Nifty formed a Shooting Star kind of pattern on daily charts which suggest that the market could have reached an intermediate top
If Nifty50 slips below 10695 levels then there is a bright chance of market triggering a sell off.
Contrary to this strength shall resume on a close above 10775 levels.
Hence, traders are advised to stay away from creating fresh longs until a sustainable breakout is registered above 10774 levels.
Three levels: 10,695, 10774, 10800
Max Call OI: 10800, 11000
Max Put OI: 10700, 10650
Technical Recommendations:
We spoke to Bonanza Portfolio and here’s what they have to recommend:
Mphasis: Buy| CMP: Rs.955.50 | Target Rs 1044| Stop Loss: Rs.914| Return 9%
HDFC Bank: Sell| CMP: Rs 2089.25 | Target: Rs 1980 | Stop Loss: Rs.2141| Return 5.20%
Zee Entertainment Ltd: Buy| CMP: Rs. 477.45| Target: Rs 521| Stop Loss: Rs.458| Return 9%
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