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Navigating the Markets: Your Essential Friday Trading Guide with 15 Key Insights.
A long build-up was seen in 83 stocks, which included Container Corporation of India, Mahanagar Gas, IndiaMART InterMESH, MCX India, and Tata Power Company.
The market finally entered consolidation mode and saw profit-taking on December 7, after a significant upward journey in the previous seven straight sessions. Hence, the said consolidation may continue for some more days with major support at the 20700-20,500 area, as long as the Nifty50 trades below the psychological 21,000 mark, but in case, the index sees a sharp upmove above the 21,000 mark, then another phase of the northward journey may be seen, experts said.
On December 7, the BSE Sensex declined 132 points to 69,522, while the Nifty50 fell 37 points to 20,901 and formed a bearish candlestick pattern with a long lower shadow on the daily scale.
Technically, this pattern indicates a breather pattern for the market posts sharp-up moves. After moving up sharply, the market is not willing to show any significant reversal on the downside itself is a positive indication for the market ahead. Such market actions are more often seen during strong trended-up moves.
There is a possibility of some more consolidation or minor weakness in the next one or two sessions before resuming a decisive up move again.
Immediate resistance is placed at 20,950 levels and an upside breakout could open the next upside target of 21,550 (78.6 percent Fibonacci extension). Immediate support is at 20,830 levels.
The hourly momentum indicator has a negative crossover and is still away from the equilibrium line, hence he expects the consolidation to continue over the next few trading sessions.
The broader markets gained a bit of strength compared to consolidation in the past two days, with the Nifty Midcap 100 and Smallcap 100 indices rising six-tenth of a percent and 0.4 percent respectively on positive breadth. About 1,193 shares advanced against the declining 933 shares on the NSE.
15 data points to help you spot profitable trades:
Key support and resistance levels on the Nifty
The pivot point calculator indicates that the Nifty is likely to see immediate resistance at 20,932, followed by 20,954 and 20,988, while on the lower side, it can take support at 20,863, followed by 20,842 and 20,807 levels.
Nifty Bank
On December 7, the Bank Nifty saw a good recovery of more than 300 points from the day's low and closed with seven points gains at 46,841, forming a bullish candlestick pattern with a long lower shadow and minor upper shadow on the daily scale, which indicated a good support based buying.
The Bank Nifty to consolidate over the next few trading sessions. The range of consolidation is likely to be 46,400 – 47,300.
Overall, he feels the trend is still positive, and dips towards the support zone of 46,600 – 46,500 should be used as an opportunity to go long.
As per the pivot point calculator, the index is expected to see resistance at 46,919, followed by 47,017 and 47,179, while on the lower side, it may take support at 46,598, followed by 46,499 and 46,338.
Call options data
The weekly options data suggests that 20,900 is expected to be a crucial level for the Nifty50 in the coming days to show the move either towards 21,000 or 20,800 levels.
On the Call side, the maximum open interest (OI) was seen at 20,900 strikes with 2.23 crore contracts, which can act as a key level for the Nifty. It was followed by the 21,000 strike, which had 1.29 crore contracts, while the 21,100 strike had 1.17 crore contracts.
Meaningful Call writing was seen at the 20,900 strike, which added 1.73 crore contracts followed by 21,100 and 22,000 strikes, which added 27.99 lakh and 20.93 lakh contracts.
The maximum Call unwinding was at the 21,500 strike, which shed 11.14 lakh contracts followed by 20,400 and 21,200 strikes, which shed 10.36 lakh and 9.79 lakh contracts.
Put option data
On the Put front, the 20,900 strike has the maximum open interest, which can act as a key area for the Nifty, with 3.37 crore contracts. It was followed by 20,800 strikes comprising 1.12 crore contracts and 20,600 strikes with 1.04 crore contracts.
Meaningful Put writing was at 20,900 strikes, which added 2.47 crore contracts followed by 20,600 strikes and 20,300 strikes, which added 32.03 lakh contracts and 13.13 lakh contracts.
Put unwinding was at 20,000 strikes.
Stocks in the news
Zomato: Japan's SoftBank is likely to sell Zomato shares worth $135 million via a block deal, sources told CNBC-TV18. In rupee terms, this amounts to Rs 1,125.5 crore. The shares will be sold at a price of Rs 120.50 per share.
Olectra Greentech: The electric bus manufacturer has received Letter of Award from Vasai Virar City Municipal Corporation, Mumbai for supply and maintenance of 40 electric buses. This order for supply of 40 electric buses is on outright sale basis, which shall be delivered over a period of seven months. Value of these 40 electric buses supply would be Rs 62.80 crore.
Five-Star Business Finance: Matrix Partners is likely to sell 5.87 percent stake in Five-Star Business Finance via block deal, reported CNBC-TV18 quoting sources. Matrix can increase the stake sale size up to 8.81 percent. The issue price has been set at Rs 730 per share.
IRCON International: The Government of India has decided to exercise the greenshoe option in the offer-for-sale (OFS) issue of IRCON International launched on December 7, and hence, will sell additional 7 percent stake in the OFS. The OFS issue, which opened for non-retail investors on December 7, was subscribed 4.6 times the base issue size. The OFS will open for retail investors on December 8.
Container Corporation of India: Container Corporation of India (CONCOR) and NTPC Vidyut Vyapar Nigam (NVVN) have signed a Memorandum of Understanding (MoU) for setting up PV Solar renewable energy projects in CONCOR terminals.
GlaxoSmithKline Pharmaceuticals: The company has established an omnichannel team to expand its reach and coverage to the target segments by leveraging technology and improve productivity. Continuing its focus on improving operating efficiencies, it has also completed the voluntary retirement scheme (VRS) (for commercial function employees in field sales and HO) and spent Rs 156.57 crore as the one-off cost of the VRS.ch shed 21.01 lakh contracts followed by 21,000 strikes, which shed 7.96 lakh contracts, and 20,200 strikes which shed 7.95 lakh contracts.
FII and DII data
Foreign institutional investors (FIIs) net offloaded shares worth Rs 1,564.03 crore, while domestic institutional investors (DIIs) sold Rs 9.66 crore worth of stocks on December 7, provisional data from the National Stock Exchange (NSE) showed.
Stock under F&O ban on NSE
The NSE has added Balrampur Chini Mills, and National Aluminium Company to its F&O ban list for December 8, while retaining Delta Corp, Indiabulls Housing Finance, India Cements, SAIL and Zee Entertainment Enterprises to the said list.
Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.
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