Indian equity benchmarks suffered sharp losses on Wednesday thanks to weakness in IT, consumer and select financial shares. However, strength in auto, metal, oil & gas and PSU banking names prevented deeper losses in headline indices.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed another long bear candle on the daily chart, a sign of the continuation of a downtrend, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
"The formation of two back-to-back long bear candles indicates a trend reversal in the Nifty after a sustainable upmove of the past 22-23 sessions... The index has also started to show weakness on the weekly chart," he said.
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All is hunky-dory till 17,650 holds
After rising more than 1,800 points in quick succession, we cannot really complain about this running correction, Sameet Chavan, Chief Analyst - Technical & Derivatives at Angel One, told CNBCTV18.com.
"Technically, things would start to become ugly if we slide below 17,650; till then, there is no reason to worry," he said.
Here are key things to know about the market before the January 20 session:
SGX Nifty
At 7:45 am on Thursday, Singapore Exchange (SGX) Nifty futures were down 78.5 points or 0.4 percent at 17,899, suggesting a negative opening ahead on Dalal Street.
Global markets
Equities in other Asian markets rose on Thursday shrugging off overnight losses on Wall Street. MSCI's broadest index of Asia Pacific shares outside Japan was up 0.6 percent at the last count.
Japan's Nikkei 225 was up 0.5 percent, China's Shanghai Composite 0.2 percent and Hong Kong's Hang Seng 1.5 percent.
S&P 500 futures in Asia were up 0.1 percent.
On Wednesday, the three main Wall Street indices fell 1-1.2 percent, as investors worried about higher US Treasury yields and earlier-than-expected tightening of monetary policy.
What to expect on Dalal Street
For Thursday's session, Angel One's Chavan sees sacrosanct support at 17,900, followed by 17,800, where the market may attract some buying interest in case of mere profit booking. On the contrary, he mentioned a shift in resistance to 18,000 and then 18,100.
He believes the banking pack could play a vital role for any recovery in the Nifty. He pegs strong support for the Nifty Bank at 37,700-37,500 and a hurdle at 38,500-39,000.
HDFC Securities' Shetti believes the underlying trend of the Nifty remains negative.
"A short-term top reversal has been confirmed at the high of 18,350 and the bearish patterns on the daily chart remains intact. The next downside levels to be watched are around 17,700-17,650, and any pullback rally could find strong resistance around 18,100," he said.
Key levels to watch out for
Nifty50: Strong support for the 50-scrip index is expected at 17,700 and key resistance at 18,300, according to Mohit Nigam, Head-PMS at Hem Securities.
Bank Nifty: For the banking index, he sees key support at 37,500 and resistance at 38,500.
FII/DII activity
Provisional exchange data shows foreign institutional investors (FIIs) net sold Indian equities worth Rs 2,704.8 crore on Wednesday. Net sales by domestic institutional investors stood at Rs 195.1 crore.
Call/put open interest
Exchange data shows that the maximum call open interest is accumulated at the strike price of 18,300, with 1.6 lakh contracts, followed by 18,100, with 1.5 lakh contracts. On the other hand, the maximum put open interest is placed at 17,500, with almost 95,000 contracts, and the next highest at 17,900, with more than 85,000 contracts.
This suggests a major hurdle at 18,100-18,300, and meaningful support only at 17,900 followed by a cushion at 17,500.
Long build-up
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 (%) |
| ONGC | 5,40,84,800 | 168.9 | 3.11% | 17.80% |
| CHAMBLFERT | 34,68,000 | 483.2 | 3.72% | 14.97% |
| BAJAJ-AUTO | 27,55,000 | 3,460.45 | 1.59% | 13.23% |
| GUJGASLTD | 18,87,500 | 698 | 3.31% | 10.60% |
| BATAINDIA | 13,29,900 | 2,036.65 | 2.81% | 9.84% |
Long unwinding
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| ADANIPORTS | 8,68,76,250 | 744.85 | -2.55% | -5.32% |
| GRANULES | 1,56,90,650 | 312.15 | -3.48% | -2.60% |
| SBILIFE | 69,45,000 | 1,246.90 | -1.78% | -2.24% |
| STAR | 50,08,500 | 425.7 | -0.14% | -2.19% |
| RAMCOCEM | 20,40,000 | 965.65 | -0.49% | -1.63% |
(Decrease in open interest as well as price)
Short-covering
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| BIOCON | 1,94,71,800 | 367.3 | 5.32% | -9.43% |
| AUBANK | 30,58,000 | 1,263 | 0.26% | -4.84% |
| RBLBANK | 2,95,91,600 | 151.1 | 0.87% | -4.26% |
| FSL | 1,09,90,200 | 170.95 | 2.06% | -3.50% |
| IDFCFIRSTB | 14,73,08,100 | 49 | 2.40% | -2.94% |
(Increase in price and decrease in open interest)
Short build-up
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| LTTS | 8,14,600 | 5,084.95 | -6.12% | 25.88% |
| ICICIPRULI | 47,58,750 | 574.6 | -5.45% | 25.30% |
| ATUL | 77,100 | 10,044 | -1.41% | 22.57% |
| CUMMINSIND | 10,39,800 | 969.2 | -1.90% | 15.29% |
| MINDTREE | 28,04,000 | 4,241.65 | -2.25% | 13.23% |
(Increase in open interest and decrease in price)
52-week highs
As many as 10 stocks in the BSE 500 pack hit 52-week highs: Bajaj Finance, Adani Transmission, Adani Green, Chambal Fertilisers, Kajaria Ceramics, Sobha, Tata Elxsi, Trent, ELGI Equipments and Lakshmi Machine.
52-week lows
Six stocks hit 52-week lows: Zydus Wellness, IGL, Dilip Buildcon, MAS Financial, Spandana Sphoorty and Jubilant Pharmova.
Volatility gauge
NSE's India VIX index — which gauges the expectation of volatility — finished the day up 0.2 percent at 17.8, having risen as much as 3.8 percent during the session.
(Edited by : Abhishek Jha)
First Published: Jan 19, 2022 7:04 PM IST
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