Indian equity benchmarks reversed sharp gains in a choppy session on Friday, dragged by financial and auto stock, though IT, pharma and consumer shares lent prevented deeper losses.
The Nifty Bank ended 0.8 percent lower, after rising nearly three percent in the past two days.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a reasonable negative candle on the daily chart with a long upper shadow, suggesting an inability of the market to sustain the highs, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
"After a sustainable upside recovery from significant lower support of the ascending trend line around 16,850-16,900 levels recently, the Nifty showing weak upside bounce is not a good sign," he said.
Time to buy on dips
The market appears to be consolidating in a narrow trading segment ahead of the Union Budget, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. He suggests a 'buying on dips' strategy for the short term as he expects the 50-scrip index to stay within a range of 16,800-17,400.
"Below 16,800, support lies at the 200-day simpe moving average of 16,700, and 16,400, below which, the biggest support is available at 16,000. Above 17,400, there are several hurdles in the 17,600-17,800 band," he said.
Here are key things to know about the market before the January 31 session:
SGX Nifty
At 7:48 am on Monday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were up 148 points or 0.9 percent at 17,240, suggesting a strong start ahead on Dalal Street.
Global markets
Equities in other Asian markets made a cautious start to a week that is likely to see a rise in UK interest rates and mixed reports on US jobs and manufacturing. Surging oil prices added to worries over inflation. MSCI's broadest index of Asia Pacific shares outside Japan was up 0.3 percent at the last count.
Japan's Nikkei 225 was up one percent and Hong Kong's Hang Seng up half a percent. The stock markets in China and South Korea were closed for the Lunar New Year eve.
S&P 500 futures were up 0.1 percent. On Fridya, US equities surged led by technology stocks. The S&P 500, the Dow Jones and the Nasdaq Composite ended 1.7-3.1 percent higher.
What to expect on Dalal Street
HDFC Securities' Shetti believes the Nifty50's underlying trend remains choppy. "There is no confirmation of any higher bottom reversal at the lows. Crucial support of the uptrend line could be tested again around 16,850-16,900 levels this week before showing another small bounce," he said. .
Independent technical analyst Manish Shah expects the index to move between 16,800 and 17,400 in the next 2-3 days. If the Nifty breaks crucial support at 16,800, a drop to 16,400 cannot be ruled out, he said.
"Traders should braced for some downside in the coming days unless the Nifty moves above 17,300 with conviction," he said.
Key levels to watch out for
Strong support for the index is expected at 17,000 and resistance at 17,400 for the near term, according to Mohit Nigam, Head-PMS at Hem Securities.
FII/DII activity
Provisional exchange data shows foreign institutional investors (FIIs) net sold Indian equities worth Rs 5045.3 crore on Friday. However, domestic institutional investors made net purchases of Rs 3,358.7 crore.
Call/put open interest
Exchange data shows that the maximum call open interest is accumulated at the strike price of 18,000, with nearly 40,250 contracts, and a high degree of contracts at 17,500, with 23,100 contracts. On the other hand, the maximum put open interest is placed at 16,500, with around 74,300 contracts.
This suggests immediate resistance at 17,500 followed by a major hurdle at 18,000, and main support at 16,500.
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 (%) |
| CIPLA | 44,10,900 | 928 | 2.45% | 60.73% |
| MFSL | 4,55,000 | 895.05 | 0.95% | 47.71% |
| AXISBANK | 1,12,32,000 | 773.95 | 3.20% | 30.34% |
| SBIN | 1,90,39,500 | 529.1 | 2.88% | 23.78% |
| M&M | 34,20,200 | 859.8 | 0.52% | 20.90% |
Long unwinding
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| BOSCHLTD | 31,200 | 16,230 | -0.45% | -86.22% |
| UBL | 1,99,150 | 1,516 | -2.76% | -58.17% |
| TORNTPOWER | 4,95,000 | 537 | -1.04% | -54.85% |
| NAM-INDIA | 7,39,200 | 323.4 | -3.10% | -48.27% |
| RAMCOCEM | 4,59,850 | 842.7 | -1.76% | -48.24% |
(Decrease in open interest as well as price)
Short-covering
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| RBLBANK | 1,15,59,400 | 153.35 | 6.12% | -69.82% |
| AUBANK | 8,02,000 | 1,276.90 | 2.09% | -34.29% |
| VEDL | 1,82,77,600 | 329.25 | 3.49% | -31.48% |
| BALRAMCHIN | 14,78,400 | 418.85 | 1.38% | -28.68% |
| INDHOTEL | 32,89,996 | 200.5 | 1.26% | -21.27% |
(Increase in price and decrease in open interest)
Short build-up
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| TECHM | 59,78,400 | 1,453 | -3.35% | 62.06% |
| MARICO | 27,63,000 | 464.4 | -0.66% | 52.23% |
| BHARATFORG | 17,58,000 | 718 | -1.47% | 51.45% |
| TORNTPHARM | 1,95,000 | 2,662.70 | -15.61% | 49.62% |
| LT | 39,61,175 | 1,913.35 | -0.64% | 41.89% |
(Increase in open interest and decrease in price)
52-week highs
Eight stocks in the BSE 500 pack hit 52-week highs, including Maruti Suzuki, PowerGrid, Lakshmi Machine, Hitachi Energy and Bharat Dynamics.
52-week lows
Alembic Pharma, Jubilant Pharmova and Vaibhav Global hit 52-week lows.
Volatility gauge
NSE's India VIX index — which gauges the expectation of volatility in the near term — ended 1.8 percent lower at 20.7 on Friday, having cooled off after rising as much as 1.1 percent during the session.
First Published: Jan 30, 2022 3:42 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
2024 Lok Sabha Elections | Why Kerala is in focus as the second phase begins to vote
Apr 26, 2024 9:33 AM
Bengaluru Rural Lok Sabha election: Over 35% voter turnout recorded by 1 pm
Apr 26, 2024 9:11 AM