Trade Setup for December 18: Has Nifty opened the door for more downside from a two-week low – CNBC TV18
| Company | Value | Change | %Change |
|---|
The Nifty also closed below the 50-Day Moving Average (DMA), which is around the mark of 24,400 after a fall of over 300 points. A look at the intraday chart would tell you that any attempt at recovering from the lows of the day was swiftly sold into.
49 out of the 50 Nifty stocks ended with losses on Tuesday with Cipla being the only outlier that barely managed to stay afloat above the flat line. 41% of the 330-point fall that the Nifty saw on Tuesday came from its top five laggards – HDFC Bank, Bharti Airtel, TCS, ICICI Bank, and L&T. Even Reliance Industries played its part in taking the Nifty lower.
It remains to be seen whether any relief is forthcoming from the institutional end on Wednesday as a lot of the IPO funds locked up would be refunded by Tuesday evening. While no such relief was seen on Tuesday when the process began, the bulls would rest their hopes on Wednesday.
Tuesday’s fall has led to the Nifty giving up nearly all the gains from Friday’s rebound. While at one point the recent swing high of 24,857 was in the picture, Tuesday’s drop has now brought Friday’s low of 24,190 into the picture as a key level to defend for the index for the remainder of the week.
Broader markets were providing some respite during these sessions of consolidation but they too fell to selling pressure on Tuesday. 76 out of 100 stocks on the Midcap index and 73 on the Smallcap index ended the session in the red.
Wednesday’s session will see three listings, that of MobiKwik, Vishal Mega Mart and Sai Life Sciences. While MobiKwik and Vishal Mega Mart saw healthy subscription figures, Sai Life saw a subdued response but may still list at a premium to its IPO price.
Global markets are on the edge ahead of key central bank decisions, including the US Federal Reserve, the impact of which will be seen during Thursday’s trading session. The Bank of Japan will also be announcing its monetary policy decision on Thursday.
Foreign institutions were heavy sellers in the cash market on Tuesday, while domestic institutions were buyers albeit in smaller quantities.
“The reason why I’m saying the markets are a bit hazy is because of the short-term volatility that we saw, the market dropped to 24,180 and then bounced back. But that hasn’t disturbed the higher timeframe price objective, which I’ve been maintaining from the 1st of October as the June 4th low- the post-election low,” Jai Bala of cashthechaos.com said.
“If the market doesn’t break 24,855, you’re already heading lower. So, that confirmation again will come when the markets break below the 24,180 low registered a few days ago. So in the very short term 24,180, the higher time frame objective, on a progressive fashion, we are looking at 23,264, and then 22,600 and then 21,300,” he added.
Despite Tuesday’s fall, Nagaraj Shetti of HDFC Securities said that the higher tops and higher bottoms pattern is still intact on the daily chart and that 24,200 – 24,000 support will be critical for the index. There will be a sizeable upside for the index in case it manages to hold these levels. Any failure to do so will result in a significant sell-off. Immediate hurdle on the upside is at 24,500.
Shrikant Chouhan of Kotak Securities said that a fresh leg of selling is possible only once the Nifty falls below the 24,275 mark, below which, the index could fall to 24,125 levels. On the other hand, a move above 24,400 can take the index back to 24,525, although the current market texture is weak.
The Nifty Bank was no stranger to the fall on Tuesday with a near-750-point fall. All 12 index constituents ended in the red and the index, which made multiple attempts to cross 53,800 on the upside but failed to do so, couldn’t defend even 53,000 on the downside on Tuesday. Although the index closed 100 points off the lows of the day, 53,000 now becomes the first hurdle to cross for the index, followed by 53,500.
Om Mehra of SAMCO Securities said that the short-term bullish trend on the Nifty Bank appears to be losing steam with a skew towards the downside along with higher volatility. He expects the index to take a few sessions to stabilise and establish a base but added that holding above 52,000 is critical for the Nifty Bank to prevent further downside.
A breakout on either side of 52,500 – 54,000 will determine the trajectory of the Nifty Bank going forward, said Hrishikesh Yedve of Asit C Mehta Investment Interrmediates, adding that the index has formed a big red candle on the daily chart, indicating weakness.
What Are The F&O Cues Indicating?
Fresh long positions were seen in these stocks on Tuesday, meaning an increase in both price and Open Interest:
| Stock | Price Change | OI Change |
| Nykaa | 1.21% | 22.11% |
| Macrotech | 1.04% | 20.55% |
| NCC | 1.03% | 8.88% |
| PB Fintech | 0.85% | 5.93% |
| United Breweries | 0.76% | 4.81% |
Fresh short positions were seen in these names on Tuesday, meaning a decline in price but an increase in Open Interest:
| Stock | Price Change | OI Change |
| Poonawalla Fincorp | -2.88% | 18.23% |
| Chambal Fertilisers | -0.46% | 15.20% |
| Coromandel | -1.13% | 11.28% |
| CG Power | -0.64% | 10.37% |
| Escorts Kubota | -3.32% | 8.82% |
Unwinding of long positions was seen in these stocks on Tuesday, meaning a decline in both price and Open Interest:
| Stock | Price Change | OI Change |
| Power Grid | -1.40% | -3.60% |
| Tata Steel | -1.51% | -3.53% |
| UltraTech | -1.53% | -3.40% |
| Max Financial | -0.43% | -3.32% |
| JSPL | -2.48% | -3.21% |
