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However, the decline on Wednesday was nowhere as significant as that seen either on Wall Street on Tuesday night or across the Asia-Pacific on Wednesday morning. It can go down as just another day in the office where the index saw some profit booking at higher levels after having had a non-stop run in one direction.
Whether one would even want to call the price action on Wednesday as profit booking is debatable. The Nifty recovered more than 100 points from the lows of the day as the index found support just below 25,100 and reversed from those levels.
Of course, a lot will depend on how Wall Street moves overnight ahead of the all important jobs data on Friday. Thursday is also the weekly expiry for the Nifty, its first for the September series and that will also have a part to play in the index moves.
Regardless of the external factors, 25,000 remains a very crucial level for the Nifty on the downside. That is a level echoed by most chartists on the street. The Nifty has not closed below the 25,000 mark since August 23. On the upside, of course, the recent high of 25,333 becomes the first key level to cross, but with strong Call writing seen at 25,200 and the 25,300 strike, that will be a challenge for the bulls to conquer.
Domestic cues are lacking but stock and sector specific moves continue, particularly within the broader markets. The US market sell-off dragged IT lower on Wednesday, which can also be in-line after the run-up seen recently, while Metals turned out to be a drag after fresh economic woes arose out of China.
Both foreign and domestic investors were net buyers in the cash market on Wednesday.
Aditya Agarwal of Sanctum Wealth expects the Nifty to trade in a broad range of 25,100 – 25,340 for the next few sessions before giving a fresh breakout. He advises using the dip towards 25,140 – 25,100 to be used in initiating fresh long positions for short-term targets of 25,300 – 25,350.
The recent fall could be seen as a breather with no alterations to the ongoing trend, said Osho Krishnan of Angel One. He believes that 25,100 – 25,080 is an immediate support for the Nifty, followed by the key support at 25,000. On the upside, 25,300 and the record high levels will act as a resistance and only a break above that can open up the next leg of upside towards 25,400 – 25,500.
LKP Securities’ Rupak De believes that the Nifty might consolidate between 25,080 and 25,250 for the time being and a fall below 25,080 can trigger further downside towards 24,800 – 24,750 levels. However, a move above 25,236 may trigger a move towards higher levels, he added.
Wednesday’s price action on the Nifty Bank almost feels like status quo being restored as the index gave up all the gains it had made during Tuesday’s trading session. Yet, it remains the index to watch out for over the last two trading sessions as it remains above the key support of 51,250 and closed exactly at the mark of 51,400.
The Nifty Bank is currently showcasing a mixed trend, having closed above its 20-DMA but below its 50-DMA. The consistent appearance of Doji candlesticks on the daily charts indicates indecision in the market, said Om Mehra of SAMCO Securities. The key support is at 51,000, with resistance at 51,800.
What are the F&O Cues Indicating?
Fresh long positions were added in these stocks on Wednesday, meaning an increase in both price and Open Interest:
| Stock | Price Change | OI Change |
| Mahanagar Gas | 0.54% | 11.54% |
| Berger Paints | 3.63% | 10.66% |
| Max Financial | 0.36% | 10.37% |
| JK Cement | 1.25% | 8.93% |
| Biocon | 5.94% | 7.98% |
Fresh short positions were seen in these stocks on Wednesday, meaning a decline in price but an increase in Open Interest:
| Stock | Price Change | OI Change |
| Coal India | -2.96% | 11.80% |
| Tata Chemicals | -2.39% | 10.80% |
| Federal Bank | -3.36% | 10.32% |
| PI Industries | -0.76% | 10.05% |
| RBL Bank | -4.42% | 9.16% |
Unwinding of long positions was seen in these stocks on Wednesday, meaning a decline in both price and Open Interest:
| Stock | Price Change | OI Change |
| Vodafone Idea | -1.38% | -92.00% |
| Gujarat Gas | -1.59% | -8.75% |
| Hindustan Copper | -2.61% | -4.03% |
These are the stocks to watch out for ahead of Thursday’s trading session:
- Reliance Industries: Heavy Industry Ministry awards 10 GWh capacity to the company under the PLI ACC scheme. ACC is Advanced Chemistry Cell.
- Sona BLW: In confirmation of a CNBC-TV18 newsbreak, the company has launched a QIP to raise up to ₹2,400 croire. the Indicative issue price is between ₹675 to ₹700 per share and the equity dilution at the lower end of the price range will be 6.06%.
- GIC Re: Government to exercise the oversubscription option in the OFS on Thursday.
- Vedanta: ICRA upgraded the long-term rating to AA from AA-
- Century Textiles: To give corporate guarantee of up to ₹400 crore to Hindalco for land in Thane.
- Suzlon: Signs conveyance deed for OE Business Park for sale of One Earth Property for ₹440 crore.
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