Indian equity benchmarks managed to finish higher for the sixth session in a row on Wednesday thanks to gains in IT shares, though losses in auto and FMCG stocks limited the upside. Investors awaited a key decision by the RBI's interest rate-setting panel due on Friday.
Globally, geopolitical tensions between the US and China, after US House of Representatives Speaker Nancy Pelosi visited Taiwan, kept investors cautious.
What do the charts suggest for Dalal Street?
The Nifty50 has formed a small positive candle on the daily chart with a long lower shadow, suggesting the making of a hanging man type pattern, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
There is no indication of a reversal unfolding at the highs, he said.
Brace for profit booking in banking
The Nifty Bank needs to take out 38,200 decisively for the continuation of an uptrend towards the 38,500-38,700 zone, said Kunal Shah, Senior Technical Analyst at LKP Securities.
"A breach of support at 37,500 will lead to further selling pressure towards 37,000 in the Nifty Bank," said Shah, who believes the banking index will only give a clear direction after the RBI's upcoming policy.
Here are key things to know about the market ahead of the August 4 session:
SGX Nifty
On Thursday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — rose as much as 89 points or 0.5 percent to 17,528.5 ahead of the opening on Dalal Street.
Global markets
Equities in other Asian markets began the day in the green tracking a rebound on Wall Street overnight. 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 0.5 percent, China's Shanghai Composite 0.4 percent and Hong Kong's Hang Seng 1.7 percent.
S&P 500 futures were flat. On Wednesday, the three main US indices surged 1-3 percent following strong profit forecasts from PayPal and CVS Health Corp. The tech stocks-heavy Nasdaq Composite climbed to its highest level since early May.
What to expect on Dalal Street
HDFC Securities' Shetti sees the possibility of further consolidation in the Nifty in the next one or two sessions around 17,400-17,250 before a sharp breakout. "The upside target to be watched is at 17,800 and immediate support at 17,220," he said.
Important levels to track
The Nifty50 stands six percent above its long-term simple moving average in a bullish signal.
| Period (No. of sessions) | SMA | |
| Nifty50 | Nifty Bank | |
| 5 | 17,332.1 | 37,903.9 |
| 10 | 17,314.9 | 37,886.1 |
| 20 | 17,308.6 | 37,884.2 |
| 50 | 17,053 | 37,446.4 |
| 100 | 16,786.5 | 36,807.8 |
| 200 | 16,384.2 | 35,645.5 |
As long as the 50-scrip index holds key support at 17,200 and 17,300, the uptrend texture is likely to continue all the way up to 17,500-17,550 levels, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
On the flipside, for the trend-following and positional traders, sacrosanct support lies at 17,200, he pointed out.
FII/DII activity
Call/put open interest
The maximum call open interest is accumulated at the strike price of 17,500, with 1.6 lakh contracts, and the next highest at 17,600, with 1.5 lakh contracts, according to exchange data. On the other hand, the maximum put open interest at 17,000, with 1.6 lakh contracts, and then 17,200 and 17,300, with 1.4 lakh each.
This suggests a major hurdle at 17,500 and immediate support in the 17,300-17,200 zone before a strong cushion at the 17,000 mark.
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 |
| NAM-INDIA | 2,204,800 | 301.3 | 4.69% | 18.07% |
| ATUL | 100,425 | 9,420 | 2.39% | 13.07% |
| EICHERMOT | 3,423,000 | 3,137 | 0.59% | 12.99% |
| PEL | 3,805,725 | 1,755.90 | 0.80% | 11.81% |
| GNFC | 3,842,800 | 748.65 | 0.50% | 9.84% |
Long unwinding
| Stock | Current OI | CMP | Price change | OI change |
| VOLTAS | 4,233,000 | 984.7 | -1.83% | -5.78% |
| ESCORTS | 2,942,500 | 1,595 | -0.07% | -3.08% |
| MFSL | 1,602,250 | 827.1 | -2.88% | -3.04% |
| ITC | 84,150,400 | 309.35 | -0.59% | -2.42% |
| BANKBARODA | 101,713,950 | 121.5 | -0.69% | -2.40% |
(Increase in price and decrease in open interest)
Short covering
| Stock | Current OI | CMP | Price change | OI change |
| TATACONSUM | 7,634,700 | 817.4 | 0.21% | -1.79% |
| BERGEPAINT | 7,269,900 | 656.1 | 0.65% | -1.21% |
| BAJAJFINSV | 765,600 | 15,304.55 | 0.16% | -0.97% |
| GUJGASLTD | 3,216,250 | 463.5 | 0.03% | -0.86% |
| CHOLAFIN | 7,753,750 | 759.4 | 1.41% | -0.48% |
(Increase in price and decrease in open interest)
Short build-up
| Stock | Current OI | CMP | Price change | OI change |
| ALKEM | 258,000 | 3,090.15 | -3.24% | 60.93% |
| INDUSTOWER | 13,014,400 | 206.45 | -6.14% | 33.46% |
| BOSCHLTD | 171,450 | 17,355.05 | -3.13% | 19.60% |
| DALBHARAT | 1,033,000 | 1,555.20 | -2.10% | 16.46% |
| NAVINFLUOR | 526,500 | 4,274 | -0.85% | 14.96% |
(Decrease in price and increase in open interest)
52-week highs
A total of 13 stocks on the BSE 500 — the broadest index on the bourse —touched the milestone:
| ADANIENT | ATGL | GESHIP | PVR |
| ADANIPOWER | BLUEDART | INDHOTEL | |
| ADANITRANS | DEEPAKFERT | INOXLEISUR | |
| AIAENG | ELGIEQUIP | M&M |
52-week lows
One stock in the 500-scrip pack hit a 52-week low: GlaxoSmithKline Pharma.
First Published: Aug 3, 2022 8:17 PM IST
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