Charts Project Nifty 50 to Remain Rangebound Until F&O Expiry

Tuesday saw another limited session in which the Nifty 50 traded in a 60-point range. HDFC Bank continued to remain on the winning side, while Infosys remained at the opposite end of the spectrum.

With two days to go before the September series expires, the Nifty 50 is still up 440 points in this series, despite a correction seen last week.

What do the experts say?

UBS’s Sunil Tirumalai wrote that India is trading at a record 80 percent premium, compared to a 20 percent premium before Modi, and a nearly 30 percent premium from 2014 until the pandemic. “This represents the premium that Indian stocks enjoy relative to the emerging market universe simply because they are listed in India,” he wrote.

Tirumalai also spoke about the rich valuations of small-cap stocks, which carry an unprecedented premium over large-caps. He remains cautious on India, which is rated underweight in the UBS EM universe. Among the sectors, he prefers banks and industrialists.

“India is one of the few markets that is resilient because of its structural history and the fact that domestic investors have been very positive about stocks. So I think those are the factors supporting Indian markets , despite the valuations especially in the equity markets. the small and mid cap space has been growing steadily since March till now,” S Naren of ICICI Prudential AMC told CNBC-TV18 during an interaction exclusive Tuesday.

What do the Nifty 50 charts indicate?

“What we are seeing now could be the preamble to a bigger drop. Currently we are working with a target of at least 18,400, it could probably get worse. So for now I see it as the beginning of a decline towards much lower levels.” said Jai Bala of cashthechaos.com.

The Nifty 50 formed an inside candle indicating continued range-bound trading in the near future, said Shrikant Chouhan of Kotak Securities. For day traders, he expects 19,620 to act as a support zone and 19,735 as a barrier to the upside. Above 19,735, he expects the index to move towards 19,780 – 19,800, while a slide below 19,620 could see the index fall towards 19,550 – 19,520.

Nagaraj Shetti of HDFC Securities believes that the bulls’ inability to witness a sustained bullish rebound may eventually result in a decisive breakout to the downside of the current range. He sees 19,750 – 19,600 as a key range to watch for the Nifty 50 in the near term.

44,500 people now hold the key to Nifty Bank

Although HDFC Bank contributed to the Nifty 50’s gains for the second consecutive day, Nifty Bank underperformed the benchmark indices. Indeed, other lenders like ICICI Bank, Axis Bank, Kotak Bank and IndusInd Bank ended the day with losses and contributed to the decline.

Bulls have established support at 44,500 while a hurdle remains at 45,000 for Nifty Bank, Kunal Shah of LKP Securities said, adding that the index needs to break either side of the range for a trend move. In case Nifty Bank recovers and trades above the 20-day moving average, some position buying can be seen on the long side and could end this consolidation phase, Shah said.

Vodafone Idea Ends at 20-Month High: Any Further Upside Prospects?

“It’s a business opportunity. You cannot invest in Vodafone Idea at these levels and expect it to generate a reasonably good return in the future. So from a business point of view you can get another 5-10% from here but from an investment point of view I still think the best play in telecom has to be Bharti Airtel,” said Dipan Mehta of Elixir Equities.

What do F&O signals indicate?

Nifty 50 September futures added 2 percent to open interest on Tuesday. Current refinances before Thursday’s expiration are 47.6 percent. Futures are trading at a premium of 12.35 points compared to 25.95 points previously. On the other hand, Nifty Bank’s September futures lost 3.7 percent in open interest on Tuesday, with rollovers now at 47.7 percent.

The Put-Call ratio of Nifty 50 is now at 0.92 compared to 0.91 earlier.

Delta Corp and India Cements have entered the F&O banned list from today’s session, while Granules India is out of the ban. Balrampur Chini, Indiabulls Housing Finance, Hindustan Copper and Canara Bank remain under ban period.

Nifty 50 Call side for September 28 expiration:

For Thursday’s monthly F&O expiry, Nifty 50 calls between 19,700 and 20,000 have been added to the open interest. The 19,700 strike saw the highest open interest addition.

Nifty 50 on Put side for September 28 expiry:

On the downside, Nifty 50 Put strikes between 19,550 and 19,650 have been added to Open Interest. In fact, the 19,200 put also saw the addition of Open Interest for Thursday’s expiration.

Let’s take a look at stocks that added new long positions on Tuesday, meaning an increase in price and open interest:

Let’s look at stocks that added new short positions on Tuesday, meaning a drop in price but an increase in open interest:

Let’s look at stocks that were short covered on Tuesday, meaning an increase in price but a decrease in open interest:

Here are the stocks whose long positions were unwound on Tuesday, meaning a decline in both price and open interest:

Here are the stocks to watch ahead of Wednesday’s trading session: