Trade Setup: Exactly a month ago, on September 27, Nifty had made a record high of 26,277. By closing on Friday, Nifty had fallen 2000 points from its record high. At the same time, it is now ready to break the level of 24000. Last week, before Diwali, Nifty saw a decline in all five trading days. Earlier last week, CLSA chartist Lawrence Balenko had called for further decline in the index. According to Balenko, Nifty may get support near the 200-day moving average (DMA) at the level of 23300. This means that Nifty may further fall by 800 points. At present, 24000 is the most important level for Nifty. The index broke as high as 24,100 during Friday’s trading session, but closed 100 points above the day’s low.
Impact of quarterly results is visible on the market
Quarterly results are having a huge impact on the market. Nifty stocks like Hindustan Unilever, Bajaj Auto, IndusInd Bank saw shares fall between 7% to 18% after quarterly results. Asset quality concerns are increasing in banks and many consumption-oriented companies are talking about weak demand. However, the bigger concern comes from the selling seen in broader markets. Both Nifty Midcap and Smallcap indices suffered their worst weekly decline since December 2022. The Nifty Midcap index also slipped into the “correction” zone, down 10% from its record high of 60,924 on September 24.
These shares will be important on Monday
On the first trading day on Monday, stocks like Coal India, ICICI Bank, Yes Bank, Indigo, Bank of Baroda, IDFC First Bank, Inox Wind, Balkrishna Industries, CMS Info Systems will react on their quarterly results. Friday marked the fourth consecutive week when the Nifty declined. Speaking to CNBC-TV18, Rohit Srivastava of IndiaCharts said that the risk-reward ratio on the short side for Nifty is more favorable than for Nifty Bank. He also said that when the market is in a downtrend, oversold levels do not necessarily work.
Quarterly results of these companies will come
Apart from this, Aditya Birla Sun Life AMC, Adani Power, Ajanta Pharma, Sun Pharma, Ambuja Cements, Bharti Airtel, Bharti Hexacom, BHEL, CAMS, Federal Bank, Gillette India, IdeaForge, IGL, Indian Bank, IOC, Jain Irrigation, JSW Infra, Motilal Oswal, Paras Defence, RailTel, Sapphire Foods, Stove Craft, Sudarshan Chemicals, Tata Technologies and other companies will announce their quarterly results on Monday.
These levels will be important for Nifty
Rajesh Bhosale of Angel One said that according to the weekly and monthly charts of Nifty, there are signs of possible price correction, which will be followed by a period of time-wise correction. He said the next important support now lies at 23900, which is the August low, followed by 23750 and 23400. On the upside, 24350-24600 may now act as near-term resistance.
HDFC Securities’ Vinay Rajni said the immediate band of 23900-24000 will act as support for Nifty, but there may be some recovery from lower levels due to oversold setup. The band of 24600-24650 should be used to exit longs and initiate new short positions. Any fall below 23900 may drag Nifty to its next positional target of 23000.
Rupak Dey of LKP Securities said that with any fall, the sentiment looks very weak. He advised that any decline towards 23300 – 24000 should be used to reduce long positions. The next major support is at 24,000, below which the decline is likely to continue.
This is the opinion of experts on Bank Nifty
Nifty Bank closed below the 51000 mark for the first time since October 7. Barring Thursday’s comeback, the index declined on four of the five trading days of the week. The index fell 2.5% last week, its third weekly decline in four. The condition of Nifty Bank on Monday will depend on how the market reacts to the results of ICICI Bank. Along with this, shares of Bank of Baroda and IDFC First Bank will also be important.
Amol Athawale of Kotak Securities said that 50500 will be a major support zone for Nifty Bank, above which, pullback formation may continue till 51200-51500 levels. He said a fall below 50500 could take the index to 50250 – 50000 levels.
What are the indications for F&O?
ITC was the only stock that added new long positions on Friday. The stock closed up 2.3%, while its open interest rose 5.9%.
New short positions were added to these stocks on Friday, which means a decline in price and an increase in open interest:
| stock | Price Change | OI Change |
| Shriram Finance | -4.58% | 10.90% |
| BHEL | -4.45% | 1.99% |
| Atul | -3.77% | 1.93% |
| Havells | -1.97% | 1.76% |
| Jubilant Foodworks | -2.51% | 1.58% |
Short covering was seen in these names on Friday, which meant rise in price but fall in open interest:
| stock | Price Change | OI Change |
| Dr. Lal Pathlabs | 2.42% | -24.80% |
| Laurus Labs | 4.09% | -19.26% |
| Astral | 0.33% | -10.76% |
| Oracle Financial | 1.66% | -10.32% |
| GCPL | 2.79% | -7.34% |
These stocks saw closure of long positions on Friday, which Meaning That is, both price and open interest declined:
| stock | Price Change | OI Change |
| HDFC Bank | -0.32% | -7.56% |
| DLF | -3.26% | -7.47% |
| REC | -1.75% | -7.29% |
| Tata Chemicals | -3.86% | -7.01% |
| Grasim | -1.68% | -6.98% |
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