Indian equity benchmarks ended a choppy session on Tuesday mildly lower, dragged losses in financial, oil & gas and metal shares, though gains in IT and power shares lent some support. The Bank Nifty continued to fall for yet another day, taking its losses to almost five percent in four back-to-back sessions.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a small negative candle on the daily chart with a long upper shadow, suggesting sell-on-rise type action, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
"One may expect the index to move lower again to the low of 16,782 levels in the short term. The negative chart pattern of lower highs and lower lows is intact on the daily chart, and Tuesday's high of 17,324 could be considered a new lower high of the sequence," he said.
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Is Nifty50 headed to 16,500?
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, pointed out that both Sensex and Nifty closed below the previous month's lows after a period of 19 months, which "is definitely negative for the market and could lead to further concerns". He said a closing below 17,450 for the Nifty50 will likely lead to the 16,500 mark in the near term.
Here are key things to know about the market before Wednesday's session:
SGX Nifty
At 7:54 am on Wednesday, Singapore Exchange Nifty futures -- an early indicator of the Nifty50 index -- were up 83.5 points or half a percent at 17,147, having gained as much as 88.5 points earlier in the day.
Global markets
Equities in other Asian markets largely moved higher despite overnight losses in the US after Federal Reserve Chairman Jerome Powell said the US central bank would consider speeding up tapering of its bond buys as inflation risks increase. MSCI's broadest index of Asia Pacific shares outside Japan was up 0.8 percent at the last count. Japan's Nikkei 225 was up 0.9 percent.
S&P 500 futures were up 0.7 percent in Asian trade. On Tuesday, the three main Wall Street indices tanked 1.6-1.9 percent. The Fed Chair's remarks put more pressure on a market already nervous about the latest Omicron variant of COVID-19.
What to expect on Dalal Street
The main support for the index on Wednesday will be at 16,880, 16,780 and 16,600 levels, and a closing below 16,880 will be negative for the market, according to Kotak Securities' Chouhan. He expects selling pressure to continue till the Nifty takes out 17,200 on a closing basis.
HDFC Securities' Shetti believes the near-term trend of the index remains negative. A display of lack of strength during the bounce could mean further weakness to 16,700 levels in the coming few sessions, he said. Shetti expects the Nifty to hit an immediate downside target of around 16,500-16,300 in 1-2 weeks.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst at Deen Dayal Investments, sees the Nifty's slide below 17,000 on a closing basis as "definitely a matter of concern", which opens the possibility of 16,500 as its next target.
Key levels to watch out for
Nifty50: Immediate support for the index is expected at 16,700 and resistance remains at 17,300, according to Mohit Nigam, Head-PMS at Hem Securities.
Bank Nifty: For the banking index, he expects support at 35,400 and resistance at 36,800.
Foreign institutional investors (FIIs) net offloaded Indian equities worth Rs 5,445.3 crore on Tuesday. However, domestic institutional investors made net purchases of Rs 5,350.2 crore, according to provisional exchange data.
The maximum call open interest is placed at the strike price of 17,500 with 1.2 lakh contracts, and the next highest at 17,300 with 1.2 lakh contracts. The maximum put open interest is placed at the strike of 16,000, with more than 85,000 contracts, and the next highest at 17,000 with more than 75,000 contracts, according to exchange data.
Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| HAVELLS | 29,29,500 | 1,353 | 1.35% | 28.88% |
| IPCALAB | 39,27,375 | 2,080 | 0.41% | 27.89% |
| IRCTC | 93,81,125 | 801.25 | 2.85% | 27.20% |
| PIDILITIND | 25,94,750 | 2,228.95 | 0.20% | 20.18% |
| FSL | 58,86,400 | 169.8 | 3.38% | 18.73% |
Long unwinding
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| IBULHSGFIN | 5,11,03,500 | 229.2 | -0.93% | -3.17% |
| SUNTV | 1,12,41,000 | 521.4 | -0.17% | -1.19% |
| HAL | 27,47,400 | 1,275 | -2.10% | -0.93% |
| ESCORTS | 59,99,950 | 1,853 | -0.48% | -0.66% |
| ZEEL | 8,13,84,000 | 325.15 | -1.72% | -0.54% |
(Decrease in open interest and price)
Short-covering
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| DIXON | 3,80,375 | 5,110.35 | 1.82% | -2.66% |
| PERSISTENT | 2,56,050 | 4,114.35 | 2.30% | -2.40% |
| SYNGENE | 10,87,150 | 598 | 1.42% | -1.95% |
| TORNTPHARM | 7,88,500 | 3,054.95 | 0.24% | -1.71% |
| OFSS | 6,61,875 | 4,235 | 0.65% | -1.23% |
Short build-up
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| GODREJPROP | 19,15,225 | 1,969.95 | -4.93% | 90.17% |
| MPHASIS | 14,26,425 | 2,862.95 | -4.68% | 77.58% |
| SRF | 27,60,625 | 2,005.80 | -2.95% | 55.15% |
| MINDTREE | 19,99,400 | 4,295.30 | -3.82% | 43.65% |
| TVSMOTOR | 56,95,200 | 679.35 | -0.67% | 30.60% |
(Increase in open interest and decrease in price)
Five stocks in the BSE 500 index hit 52-week highs: Raymond, KPIT Technologies, Orient Electric, Sheela Foam and Timken India.
52-week lows
Hero MotoCorp, Spandana, VST Industries, CreditAccess Grameen and Swan Energy were among the nine stocks in the broadest gauge on the bourse that hit the trough.
NSE's India VIX index — which measures the expectation of volatility in the near term — rose 1.62 percent to 21.2 on Tuesday, after leaping as much as 5.5 percent during the session.
First Published: Nov 30, 2021 7:43 PM IST
