Street Signs: Nifty50 rises, Whirlpool of India may face F&O axe, and more

NSE Nifty50's sharp rebound from its 200-day moving average of 17,400 is what is giving technical analysts the requisite confidence

Nifty on the up and up after pull-back

After logging its biggest single-day gain in nearly four months, the benchmark National Stock Exchange Nifty50 is seen moving even higher. A sharp rebound from its 200-day moving average of 17,400 is what is giving technical analysts the requisite confidence. The Nifty last closed at 17,594 on Friday. “On the daily chart, the Nifty has given a consolidation breakout, suggesting a rise in optimism. The Nifty may move higher once it moves above 17,650; at the higher end, resistance is visible at 17,800. At the lower end, support is visible at 17,470,” says Rupak De, senior technical analyst, LKP Securities. Some believe that as long as the market holds above its recent low of 17,255, the trend will remain positive.

Lock-in expiry for three companies draws closer

YES Bank, Dharmaj Crop Guard, and Uniparts India will be watched this week as the lock-up on a portion of their shares is set to expire. In the case of YES Bank, it is the three-year lock-in period on State Bank of India and other lenders imposed by the Reserve Bank of India as part of its equity restructuring programme. Meanwhile, in the case of Dharmaj and Uniparts, it is a 90-day lock-in period for anchor investors. Analysts say the three stocks may come under pressure, given the prevailing weak sentiment on account of rate-hike fears by the US Federal Reserve. At present, Dharmaj is trading 29 per cent below its issue price; Uniparts is trading at 3.3 per cent below its issue price. The acquisition cost for the lenders of YES Bank shares was Rs 10 apiece, against the current price of Rs 16.9. 

Whirlpool of India may face F&O axe

Whirlpool of India is expected to get removed from the derivatives segment. In the past, stocks getting removed from the futures and options (F&O) segment have tended to underperform. “Seven of nine times, a stock has corrected two and one week(s) before the announcement, with an average decline of 4.5 per cent and 3.5 per cent, respectively,” says a note by Nuvama. The brokerage says the reason for Whirlpool’s exclusion is low open interest. It says the Whirlpool exclusion announcement could come in the latter half of this month.