Bizz Buzz Pre-market Thursday: Things to know before the opening bell

In the stock market update for Thursday, December 28, 2023, analysts anticipate a continuation of the bullish trend following a significant consolidation breakout ahead of the monthly expiry of December derivative contracts. The Nifty 50 is expected to encounter immediate resistance at the 21,700-21,800 levels, with subsequent resistance at the 22,000 mark. The formation of higher highs, higher lows, and positive momentum indicators supports this outlook. The 21,500 level, which previously acted as resistance, is anticipated to serve as support for the index.

On December 27, the benchmark indices closed at fresh record highs, with the BSE Sensex surpassing the 72,000 mark for the first time, rising 702 points to 72,038. The Nifty 50 surged 214 points to 21,655 and formed a long bullish candlestick pattern on the daily timeframe, indicating an upside breakout of the previous swing high at 21,593 levels.

Nagaraj Shetti, senior technical research analyst at HDFC Securities, highlighted the positive chart patterns, including higher tops and bottoms, and noted that the Nifty is moving towards a new higher top formation. Despite the absence of confirmation of any higher top reversal at the highs, the breach above the immediate resistance of 21,550-21,600 levels suggests the possibility of more upside in the short term. Shetti identified the next upside targets at 22,000-22,200 levels, with immediate support at 21,300 levels.

Given the monthly expiry and its significance from the calendar year-end perspective, Rajesh Bhosale, technical analyst at Angel One, expects potential price settlements and increased volatility. Traders are advised to view this as an opportunity and explore trending trading opportunities.

Volatility has surged to the highest level since March 20, raising concerns about the trend becoming unfavorable for bulls. The India VIX rose 6 percent to 15.56 levels.

Key support and resistance levels on the Nifty, as indicated by the pivot point calculator, suggest immediate resistance at 21,722, followed by 21,789 and 21,969 levels. On the lower side, support can be expected at 21,542, 21,429, and 21,249 levels.

The Bank Nifty outperformed the benchmark Nifty 50 on December 27, climbing 557 points or 1.2 percent to end at a record closing high of 48,282. The pivot point calculator indicates resistance levels at 48,484, 48,686, and 49,227, with support at 47,943, 47,604, and 47,064 levels.

In the options data, the maximum Call open interest remains at the 22,000 strike, followed by the 21,800 and 21,700 strikes. Meaningful Call writing is observed at the 21,700, 21,800, and 22,000 strikes. The maximum Call unwinding is at the 21,500 strike.

On the Put side, the 21,500 strike has the maximum open interest, followed by the 21,000 and 21,600 strikes. Meaningful Put writing is observed at the 21,600, 21,500, and 21,000 strikes. Put unwinding is seen at the 21,300 strike.

Among the F&O stocks, Bosch, Gujarat Gas, Oracle Financial, Dabur India, and Cholamandalam Investment & Finance saw high delivery percentages, indicating investor interest.

Stocks with a long build-up include Bajaj Auto, SAIL, JK Cement, Vodafone Idea, and UltraTech Cement. Stocks with long unwinding include Hero MotoCorp, Hindustan Petroleum Corporation, Chambal Fertilisers, Laurus Labs, and GNFC. A short build-up is observed in India Cements, Jubilant Foodworks, SBI Cards and Payment Services, Shree Cement, and Container Corporation of India. Short-covering is seen in Indiabulls Housing Finance, MCX India, National Aluminium Company, Oracle Financial, and Navin Fluorine International.

The Nifty Put Call ratio (PCR) spiked to 1.43, the highest since December 15, indicating an increase in bearish sentiment.

In the news, Azad Engineering will list its equity shares on the bourses on December 28 with a final issue price of Rs 524 per share. The Competition Commission of India (CCI) has approved the acquisition of the stake in Reliance Capital by IndusInd International Holdings Limited, IIHL BFSI (India) Limited, and Aasia Enterprises LLP. Coromandel International's plant in Ennore near Chennai was temporarily suspended after an ammonia leak on December 26. Canara Bank has approved the process of listing its mutual fund subsidiary Canara Robeco Asset Management Company via an initial public offer (IPO). Tata Power Company has acquired 100 percent equity stake in Bikaner III Neemrana II Transmission. S Sunder Krishnan is appointed as Chief Risk Officer of LIC, effective from December 27.

Foreign institutional investors (FIIs) turned net buyers after seven consecutive sessions, purchasing shares worth Rs 2,926.05 crore, while domestic institutional investors (DIIs) turned net sellers, offloading Rs 192.01 crore worth of stocks on December 27.

In the F&O segment, National Aluminium Company and RBL Bank remain on the ban list for December 28, while Balrampur Chini Mills, Delta Corp, and Hindustan Copper have been removed. Securities banned under the F&O segment include those where derivative contracts cross 95 percent of the market-wide position limit.