A morning walk down Dalal Street | October series may witness further volatility; crucial support for Nifty at 10,866

Next crucial support for Nifty is placed at 10,866. If the index breaches this support in October series then next support is placed at 10,797.

Indian markets failed to hold on to gains and closed negative on the September expiry day on Thursday. The S&P BSE Sensex closed 218 points lower while the Nifty50 failed to hold on to 11K and closed at 10,977, down 76 points.

Sensex skips 6 percent in September series while Nifty rollover according to provisional data stands at 63 percent for October series compared to 68 percent seen in the beginning of September series, and 3-month average which is also placed around 68 percent.

Lower overall roll-overs put pressure on stocks, especially in the Financials.

Nifty corrected by 0.7 percent for the day and is down by 6 percent the September series. The Nifty Bank index corrected by almost 11 percent.

Higher crude oil prices, as well as fall in currency in the second half of the session, led to some bit of sell-off on D-Street.

From the primary market front, State-owned railways engineering and construction firm Ircon International is set to debut on bourses on September 28 after good subscription to its public issue.

The Rs 466-crore initial public offer was subscribed 9.9 times during September 17-19, 2018. The issue price is fixed at higher end of price band of Rs 470-475 per share.

Dinesh Engineers will open for subscription today. The company after consultation with merchant bankers has fixed price band at Rs 183-185 per share for the issue.

Big News:

Markets plummeted in the September series with the Bank Nifty shedding 11 percent on an expiry-on-expiry (eoe) basis, witnessing its biggest fall since July 2013, when it had fallen by 13 percent.

Across-the-board selling was witnessed in all major sectoral indices with Realty, Auto, and Financial services, Media, and PSU Bank recording more than 10 percent declines.

Rollovers of Nifty/Bank Nifty stood at 63/66 percent compared to 68/66 percent seen in the last series.

Rollovers for Nifty and Bank Nifty were lower in terms of total open interest (number of open positions) vis-à-vis last month as well as the average of the last three months, indicating further volatility in the October series.

Short Buildup: Cholamandalam Investment, Page Industries, Allahabad Bank, DCB Bank, Jet Airways.

Short covering: Bajaj Auto, NTPC, TCS

Technical View:

Technically, Nifty formed a bearish candle and the next crucial support is placed at 10,866

If Nifty breaches this support in October series then next support is placed at 10,797

Resistance is placed at 11,145

Max Call OI: 11500, 11200

Max Put OI: 11000, 10800

Technical Recommendations:

We spoke to Epic Research and here's what they have to recommend:

Chennai Petroleum: Buy| LTP: 281| Target: Rs 305| Stop Loss: Rs 270| Return 8%

HCL Technologies: Sell| LTP: Rs 1090| Target: Rs 1050| Stop Loss: Rs 1120| Return 4%

Shriram Transport Finance: Sell| LTP: Rs 1150| Target: Rs 1125| Stop Loss: Rs 1185| Return 2%Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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