Indian equity benchmarks scaled their highest closing levels in more than a month on Tuesday, as the bulls stayed in charge of Dalal Street for a third back-to-back session.
Investor focus remained on the corporate earnings season for domestic cues. Globally, caution persisted over steep hikes in COVID-era interest rates and their impact on economic growth.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a long bull candle on the daily chart following a similar candle the previous day, suggesting rangebound action or consolidation at a hurdle, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
"Crucial overhead resistance at 16,250-16,300 levels has been surpassed gradually. Technically, such choppy movement or rangebound action is not a good sign for the bulls to sustain the highs," he said.
Key support at 16,220
Traders should look for stock-specific buying opportunities and act with a positive bias, said Ruchit Jain, Lead Research at 5paisa.com.
"In case of any decline, immediate support for the 50-scrip index is expected around the hourly 20-day exponential moving average around 16,220. On the flipside, the near-term upside for the Nifty is seen around 16,550-16,650, where we could see a confluence of hurdles," he said.
Here are key things to know about the market ahead of the July 20 session:
SGX Nifty
Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — jumped as much as 184.5 points or 1.1 percent to touch 16,522 ahead of the opening bell on Dalal Street on Wednesday.
Global markets
Shares in other Asian markets saw sharp gains mirroring a strong session on Wall Street overnight, as optimism on earnings in the US took investors' minds off the prospect of steep hikes in COVID-era interest rates causing an economic slowdown. MSCI's broadest index of Asia Pacific shares outside Japan was up 1.3 percent at the last count.
Japan's Nikkei 225 was up 2.3 percent, China's Shanghai Composite 0.6 percent and Hong Kong's Hang Seng 1.9 percent.
S&P 500 futures were up half a percent. That was a day after the S&P 500 finished 2.8 percent higher, and the Dow Jones and Nasdaq Composite indices climbed up 2.4 percent and 3.1 percent respectively.
What to expect on Dalal Street
HDFC Securities' Shetti believes the uptrend in the Nifty remains intact from a short-term perspective. However, a lack of strength in the upside momentum could bring the bears into action from higher levels.
"A decisive move above 16,300 is likely push the Nifty towards another hurdle of 16,500-16,600 levels in the near term with immediate support at 16,200," he said.
Important levels to track
The Nifty50 is still about four percent below its long-term simple moving average, though it has narrowed the distance in the past few sessions.
| Period (No. of sessions) | SMA | |
| Nifty50 | Nifty Bank | |
| 5 | 16,058.3 | 34,930.5 |
| 10 | 16,066.1 | 34,830.7 |
| 20 | 15,890.9 | 34,136.8 |
| 50 | 16,026.5 | 34,251 |
| 100 | 16,534.5 | 35,134.2 |
| 200 | 17,073.2 | 36,448.8 |
Mohit Nigam, Head-PMS at Hem Securities, has identified the following levels to watch out for:
| Index | Support | Resistance |
| Nifty50 | 16,200 | 16,500 |
| Nifty Bank | 35,400 | 36,000 |
FII/DII activity
In contrast to the trend seen on Dalal Street, foreign institutional investors (FII) emerged net buyers on Tuesday.
Call/put open interest
The maximum call open interest is accumulated at the strike price of 16,600, with 1.6 lakh contracts, and the next highest at 16,500, with 1.2 lakh contracts, according to exchange data. The maximum put open interest is at 16,200 and 16,000, with 1.6 lakh and 1.3 lakh contracts respectively.
This suggests an immediate hurdle at 16,500 and immediate support at 16,200 before a strong cushion at the 16,000 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 |
| ESCORTS | 2,181,300 | 1,754.90 | 5.14% | 22.47% |
| CUB | 9,325,000 | 159.9 | 3.46% | 18.45% |
| AUBANK | 6,614,000 | 560.4 | 0.82% | 16.56% |
| POLYCAB | 1,182,000 | 2,237.85 | 4.63% | 12.39% |
| M&M | 14,636,300 | 1,177.90 | 1.43% | 9.39% |
Long unwinding
| Stock | Current OI | CMP | Price change | OI change |
| ABBOTINDIA | 39,720 | 19,783.75 | -0.78% | -4.13% |
| NAVINFLUOR | 389,025 | 3,736.25 | -0.99% | -4.11% |
| MRF | 92,200 | 79,650 | -0.83% | -2.83% |
| INTELLECT | 1,043,250 | 671.05 | -0.07% | -2.37% |
| LALPATHLAB | 1,145,250 | 2,014 | -0.13% | -1.92% |
(Decrease in open interest as well as price)
Short covering
| Stock | Current OI | CMP | Price change | OI change |
| VOLTAS | 3,775,000 | 1,048.30 | 1.13% | -4.57% |
| BPCL | 13,035,600 | 317 | 0.25% | -4.49% |
| SRTRANSFIN | 4,001,400 | 1,384.65 | 1.17% | -4.06% |
| RECLTD | 26,994,000 | 126.35 | 1.69% | -3.47% |
| LTTS | 1,399,400 | 3,199.50 | 0.61% | -3.02% |
(Increase in price and decrease in open interest)
Short build-up
| Stock | Current OI | CMP | Price change | OI change |
| COFORGE | 770,850 | 3,350.95 | -2.32% | 20.67% |
| GAIL | 23,588,700 | 140 | -2.51% | 17.61% |
| GUJGASLTD | 3,403,750 | 446.1 | -2.02% | 10.83% |
| BIOCON | 13,563,100 | 328.75 | -1.29% | 10.12% |
| INDUSTOWER | 14,408,800 | 221.7 | -2.46% | 9.46% |
(Decrease in price and increase in open interest)
52-week highs
A total of 10 stocks in the BSE 500 universe — the broadest index on the bourse — reached the milestone: TVS Motor, Eicher, Adani Enterprises, ABB, AIA Engineering, Great Eastern Shipping, M&M Financial, Siemens, Tube Investments, Timken and Varun Beverages.
52-week lows
No stock in the 500-scrip index hit a 52-week low.
First Published: Jul 19, 2022 6:06 PM IST
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