Indian equity benchmarks reached their highest closing levels in four months yet again on Wednesday, with the Nifty50 continuing to rise for the seventh session in a row.
Gains in financial, IT and FMCG shares powered the rise in headline indices, though losses in select auto stocks capped the upside.
What do the charts suggest for Dalal Street?
The Nifty50 has formed a small positive candle on the daily chart with minor upper and lower shadows, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The 50-scrip index's move to take out a key hurdle at 17,900 is a positive sign, he said.
Some correction cannot be ruled out
The bulls have kept the momentum going to take the Nifty towards 18,000 on the back of softening inflation and strong FII buying, and one can expect the uptrend to continue, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
"A quick intraday correction is not ruled out if it slides below 17,850, which could touch lead to 17,700-17,680 levels... Above 17,850, the first upside target for the index would be 18,000, which could be followed by a move up to 18,175," he added.
Here are key things to know about the market ahead of the August 18 session:
SGX Nifty
Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — fell as much as 53.5 points or 0.3 percent to 17,914.5 ahead of the opening bell on Dalal Street.
Global markets
Equities in other Asian markets were largely lower on Thursday even as Wall Street indices eased from their lowest levels of the day, after minutes from the Fed's last policy meeting showed officials may be less aggressive than previously thought when they raise interest rates in September. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.4 percent at the last count.
Japan's Nikkei 225 was down 0.8 percent, and China's Shanghai Composite and Hong Kong's Hang Seng 0.5 percent each.
S&P 500 futures were down 0.1 percent. On Wednesday, the S&P 500 finished 0.7 percent lower. The Dow Jones declined 0.5 percent and the tech stocks-heavy Nasdaq Composite 1.3 percent.
What to expect on Dalal Street
HDFC Securities' Shetti is of the view that any lack of strength around 17,900-18,000 levels in the next 1-2 sessions could pull the Nifty lower in the short term.
"A decisive move above 18,000 is likely to pull the Nifty towards the next upside target of 18,600 in the near term. Immediate support is at 17,760," he said.
Key levels to watch out for
In a bullish sign, the Nifty50 remains about six percent above its long-term simple moving average.
| Period (No. of sessions) | SMA | |
| Nifty50 | Nifty Bank | |
| 5 | 17,936.6 | 39,393.3 |
| 10 | 17,906.2 | 39,338.8 |
| 20 | 17,834.1 | 39,258.8 |
| 50 | 17,671.4 | 38,780.1 |
| 100 | 17,457.6 | 38,266.4 |
| 200 | 16,904.1 | 37,034.4 |
Mohit Nigam, Head-PMS at Hem Securities, identified the following support and resistance levels:
| Index | Support | Resistance |
| Nifty50 | 17,750 | 18,180 |
| Nifty Bank | 39,000 | 40,000 |
FII/DII activity
Call/put open interest
The maximum call open interest is accumulated at the strike price of 18,000, with 1.6 lakh contracts, and the next highest at 18,200, with 1.3 lakh, according to exchange data. On the other hand, the maximum put open interest is at 17,800, with 1.7 lakh contracts, and at 17,900, with 1.4 lakh.
This suggests strong resistance at the 18,000 mark and a firm base in the 17,800-17,900 zone.
Long build-up
Here are five stocks that saw an increase in open interest as well as price:
| Stock | Current OI | CMP | Price change | OI change |
| WHIRLPOOL | 495,250 | 1,822 | 1.25% | 45.16% |
| RECLTD | 21,786,000 | 105.65 | 2.26% | 40.82% |
| BSOFT | 5,249,400 | 340.6 | 0.87% | 17.56% |
| APOLLOTYRE | 12,946,500 | 260.8 | 3.78% | 16.55% |
| SBICARD | 5,720,000 | 1,003.25 | 4.20% | 13.73% |
Long unwinding
| Stock | Current OI | CMP | Price change | OI change |
| ABB | 994,500 | 2,879.95 | -0.90% | -5.30% |
| ESCORTS | 2,023,450 | 1,825.75 | -1.19% | -5.03% |
| POLYCAB | 902,700 | 2,445.05 | -0.08% | -4.25% |
| GSPL | 3,870,000 | 245 | -0.67% | -3.88% |
| INTELLECT | 1,932,750 | 632.1 | -0.30% | -3.84% |
(Increase in price and decrease in open interest)
Short covering
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| LICHSGFIN | 13,108,000 | 396.8 | 0.46% | -5.66% |
| VOLTAS | 4,144,000 | 1,027.50 | 0.71% | -4.43% |
| IRCTC | 13,734,000 | 671 | 1.03% | -4.06% |
| BERGEPAINT | 6,985,000 | 704.75 | 3.61% | -3.91% |
| FSL | 15,787,200 | 110.7 | 3.55% | -3.82% |
(Increase in price and decrease in open interest)
Short build-up
| Stock | Current OI | CMP | Price change | OI change |
| SRTRANSFIN | 3,793,800 | 1,362.60 | -0.62% | 14.99% |
| ALKEM | 372,200 | 2,941.95 | -0.63% | 11.23% |
| ASHOKLEY | 40,545,000 | 148.2 | -1.30% | 9.66% |
| PVR | 2,838,418 | 1,942.95 | -2.38% | 5.51% |
| POWERGRID | 31,085,100 | 226.6 | -0.13% | 4.66% |
(Decrease in price and increase in open interest)
First Published: Aug 17, 2022 8:07 PM IST
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