Stock market today: Indian equity benchmarks extended their losing streak on Tuesday as the absence of a Middle East peace deal kept crude oil prices and global bond yields elevated, fuelling concerns over further foreign investor outflows from domestic equities.
The Nifty 50 declined 0.28% to close at 22,716.2, while the BSE Sensex slipped 0.33% to 72,529.07. The Nifty 50’s indicative closing level briefly plunged around 2.5% during the closing auction session, amid heightened volatility surrounding the monthly expiry of derivatives contracts.
With Tuesday’s decline, the benchmark indices have lost nearly 2% so far in the holiday-shortened week, extending the weakness seen over the past several weeks. The indices have fallen nearly 6% over the last seven weeks, marking one of their longest losing streaks on record.
Global cues also remained challenging, with Brent crude futures hovering around $105 a barrel, while the benchmark 10-year US Treasury yield surged above 5.27%, its highest level in 19 years.
Market Outlook by Jay Thakkar, Vice President & Head of Derivatives and Quant Research, ICICI Securities
Nifty 50
Jay Thakkar said the Nifty 50 has found support near the 22,500 level, where the highest put base is seen, and is currently respecting this zone. This has shifted the short-term trading range to 22,500–23,000, from the earlier 23,000–23,500 range following the break below 23,000.
According to Thakkar, as long as Nifty 50 holds above 22,500, dips within the range could be used as buying opportunities, while rallies towards 23,000 could be used for selling until the index decisively moves above that level. A sustained move above 23,000 could trigger sharp short covering, whereas a break below 22,500 could lead to another sell-off similar to the one seen after the breakdown of 23,000.
On volatility, Thakkar noted that the India VIX closed nearly 2% lower, a positive signal. However, options data continues to show a strong call base at the 23,000 strike, suggesting that volatility could persist until the index decisively clears this level.
Turning to Bank Nifty, Thakkar said the strong recovery in the previous session has made 54,000 an immediate support level, with 53,000 and 52,000 emerging as the next key supports.
For traders, Thakkar said an aggressive buying strategy should be considered only above 23,000, as a move beyond this level would confirm a reversal. Until then, he suggested a contrarian approach at the extremes of the 22,500–23,000 range. A break below 22,500 could open the door for short positions, with the next targets at 22,200–22,000.
Stocks To Buy in the near-term – Jay Thakkar
Jay Thakkar of ICICI Securities recommends Alkem Laboratories futures, KFin Technologies futures, and Amber Enterprises India futures.
Buy Alkem Laboratories Futures in the range of ₹5,300-5,330; stop loss below ₹5,250; Targets ₹5,450-5,550
Alkem has been consolidating within a range of 5,200-5,700 since past few months, however, there has been increase in open interest indicating long built up in the stock, so the probability of an upward breakout is higher. As per the options data of October series, there has been significant put additions at 5,100-5,300 strikes and the stock is just trading above those levels, hence there is good upside potential from the current levels as well as the call base is at 5,500 which is between our target levels, hence one can go long on Alkem as the risk: reward ratio is quite favorable for the bulls.
Sell KFin Technologies Futures on rise in the range of ₹835- ₹845 stop loss above ₹865; Targets ₹800-785
The stock has been trending lower and it has been one of the underperformers within its sector as well as overall market indicating that the short-term trend is down. The stock has also witnessed increase in open interest with fall in price indicating short built up, so that confirms the overall trend as down. As per the options data, there has been significant additions in the call side from 860-900 strikes and hence the stop loss is suggested above 865 levels, whereas, 760 has the highest put base which is lower than our recommended target. The max pain is at 900 and the stock is trading reasonably lower than that indicating overall weakness.
Sell Amber Enterprises Futures on rise in the range of ₹6,730- ₹6,750; stop loss above ₹6,900; Targets ₹6,400- ₹6,300
Amber has broken its critical support range of 6,750-6,700, which it has held for the past 4-5 months, and this has happened with a slight increase in open interest, suggesting some shorts have been built. Earlier, the correction was due to long unwinding followed by short build-up, which could not break the range lower; hence, it witnessed complete short covering. However, since the critical levels are broken,shorts are added. As per the options data, 6,800 and 7,000 strikes have added calls, and 6,700-7,000 have witnessed put additions, so the options data is indecisive, but since the price is trading well below 7,000 levels, which is the max pain, so the chances of a further downtrend are higher until 6,900-7,000 levels are not taken off convincingly.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
