If you look at Monday's closing level on the Nifty 50, you may wonder whether the market even traded on Monday. However, the index travelled both ways through the session, reversing from supports and facing trouble in resistance zones. Perfectly respecting the range.

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The Nifty 50 ended 70 points higher than the intraday low of 19,601 and 60 points off the day's high of 19,734. The 130-point range showcased the perfect bulls versus bears battle on the street at the start of the September F&O series expiry week.

While Infosys, Reliance and TCS dragged the index lower, the financials, led by Bajaj Finance, ICICI Bank, Kotak Bank and last week's top loser HDFC Bank ensured that the Nifty 50 does not break below key support levels.

What Are The Experts Saying?

"India is heading (and already entered) a new upcycle which will last for several years. Any corrections were characterized as the end of a cycle. The reality is that all the signs suggest that we are in that phase and a similar disbelief on a cycle remains. Until we see a case arguing against the room for a cycle, we prefer remaining as buyers on any correction in the equity markets. Financials and capex-linked stories will lead the cycle followed by a broader recovery in consumption," said Venugopal Garre of Bernstein.

Ridham Desai of Morgan Stanley wrote that the opening up of sovereign bond market and the resultant inflows are likely to be beneficial for Indian equities due to the positive impact of growth. "In terms of sector preferences, we like Financials and Consumer discretionary and would avoid global materials," he wrote.

What Do The Nifty 50 Charts Indicate?

Well, the Nifty 50 has barely moved from Friday's levels, respecting both the 19,600 support on the downside, and facing pressure near the resistance zone of 19,750.

Nagaraj Shetti intends to watch 19,580 as a key level on the downside for the Nifty 50 as that has offered a strong support for the Nifty 50 over the last 3-4 months. Hence, he expects an upside bounce on the index in the near term with upside resistance seen at levels of 19,850.

"The Nifty 50 has remained volatile before closing with a doji patten on the daily chart, said Rupak De of LKP Securities. This suggests a possible pause in the prevailing bearish trend. He expects the market to consolidate before starting a new trend. De sees new short positions only on a break below 19,600 with an upside resistance seen at 19,755.

Mehul Kothari of Anand Rathi said that the 19,600 level is the make or break level for both bulls and bears of the Nifty 50. A fall below that may extend the selling pressure, while holding these levels could lead to potential upsides towards 19,800.

Will The Nifty Bank Start To Step Up?

Monday was a topsy turvy day for the Nifty Bank. While one can take heart from the fact that HDFC Bank, Kotak Bank and ICICI Bank ensured the Nifty 50 stayed where it was, it still could not cross the 45,000 mark on the upside, reversing from 44,936. The index eventually closed nearly 200 points off the day's high but still managed to outperform the Nifty 50.

Kunal Shah of LKP Securities said that the index continues to remain below its 20-DMA despite some traction from lower levels. He expects resumption of the upward momentum only after the Nifty Bank closes above the 45,000 mark. Support on the downside now rests between 44,500 - 44,000 and a breach of this support range could result in additional selling pressure on the index, Shah said.

Anand Rathi's Kothari also cited 44,400 as a key level for the Nifty Bank, below which the selling pressure may intensify. Upward momentum will resume only on a close above the 45,000 mark.

Delta Corp's Mounting Troubles

The stock of Monday's trading session but for the wrong reasons was Delta Corp. The stock ended 17 percent lower on Monday after it received GST demand notices worth nearly Rs 17,000 crore. This replicated July 12's 23 percent drop it had when GST rates on casinos were raised. The stock also saw a large block deal, in which 1.7 crore shares worth Rs 236 crore exchanged hands. The stock is now out of the F&O ban list from today's session.

Gurmeet Chadha of Complete Circle told CNBC-TV18 that he would not be a "braveheart" and look to buy Delta Corp now. "Probably at some point of time the valuation will become very very cheap but this is going to be a long legal battle. This is the risk with SIN stocks, that regulatory intervention, tax demands, that is always a risk," he said. Among the SIN stocks he likes, Chadha mentioned ITC and United Spirits.

What Are The F&O Cues Indicating?

Nifty 50's September futures added 3.3 percent in Open Interest on Monday. Current rollovers are at 34.6 percent. The futures are trading at a premium of 25.95 points compared to 34 points earlier. The Nifty Bank's September futures added 6.7 percent in Open Interest with current rollovers at 42 percent. Nifty 50's Put-Call Ratio is now at 0.91 from 0.93 earlier.

Balrampur Chini has entered the F&O ban list, while Delta Corp and Manappuram Finance are out of the ban period. Indiabulls Housing Finance, Hindustan Copper, Canara Bank and Granules India continue to remain in the ban list.

Nifty 50 on the Call side for September 28 expiry:

For this Thursday's expiry, the Nifty 50 call strikes between 19,650 and 19,900 have seen Open Interest addition. The 19,700 strike has seen the maximum addition in Open Interest.

Nifty 50 on the Put side for September 28 expiry:

On the downside, the Nifty 50 put strikes between 19,400 and 19,600 have seen Open Interest addition, with the 19,400 strike seeing the maximum addition.

Lets take a look at the stocks that saw short covering on Monday, meaning an increase in price but decrease in Open Interest:

Lets look at the stocks that saw unwinding of long positions on Monday, meaning a decrease in both price and Open Interest:

Here are the stocks to watch out for ahead of Tuesday's trading session:

ITC: CMD Sanjiv Puri tells CNBC-TV18 that the hotel business can fund its expansion for the next 2-3 years and he does not see a significant need to raise capital for the soon-to-be-demerged business.

Tata Steel: Moody's upgrades Tata Steel's credit rating to investment grade with a Baa3 issuer rating and a stable outlook.

Sheela Foam: Raises Rs 1,194 crore through the QIP issue. To allocate 1,11,31,725 equity shares at an issue price of Rs 1,078 per share, which is a 5 percent discount to the floor price of Rs 1,133.99 per share.

Angel One: To consider September quarter earnings along with second interim dividend on October 12. Record date for the dividend, if any, has been set as October 20.

Wipro: Sells building and 14.02 acre plot in Chennai for Rs 266.4 crore.

Ujjivan Small Finance Bank: Partners with SMC Global Securities to offer online trading services to the bank's customers. The services will comprise of savings, demat and trading accounts.

Welspun Corp: To invest up to Rs 350 crore in Telangana to set up a manufacturing unit for its subsidiary Sintex.

RPP Infra: Wins new orders worth Rs 482 crore through letter of acceptance for projects in Tamil Nadu and Karnataka.

What Are The Global Cues Indicating?

Asia-Pacific markets largely fell despite a broad rebound on Wall Street.

The Nikkei 225 reversed Monday's gains and is down 0.4 percent, while the Topix is down 0.2 percent. The wholesale services inflation in Japan rose 2.1 percent, the fastest pace since September last year.

South Korea's Kospi fell 0.6 percent but the Kosdaq is bucking the trend, rising 0.5 percent in early trade.

Hang Seng's futures are also pointing to a strong start to the trading session.

Wall Street saw some gains on Monday despite a Moody's warning that a US government shutdown will be a credit negative for the world's largest economy.

The Dow Jones added 0.1 percent, while the S&P 500 and the Nasdaq gained 0.4 percent each, snapping a four-day losing streak.

Foreign investors continued to remain sellers in the cash market on Monday, while domestic investors were net buyers.

First Published:Sept 25, 2023 9:32 PM IST