Indian equity benchmarks tanked three percent on Monday -- their biggest loss in 10 months -- amid a global sell-off triggered by escalating tensions between Russia and the West over Ukraine.

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The India VIX index, known in market parlance as the fear gauge, surged 23 percent to finish close to the 23 mark -- its biggest jump since November 26.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a long bear candle on the daily chart and the steeply lower start could be considered a downside breakaway gap, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

"This is not a good sign and signals more weakness ahead," he said.

Danger zone

Besides panic selling in global markets on geopolitical tensions and rising oil prices, foreign fund outflows also caused the 50-scrip index to give up the 17,000 mark, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. As long as the Nifty trades below 17,050, there are chances it could hit 16,750 and 16,550 levels, he said.

Here are key things to know about the market before the February 15 session:

SGX Nifty

At 7:51 am on Tuesday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were up 95.5 points or 0.6 percent at 16,934.5, suggesting a positive opening ahead on Dalal Street.

Global markets

Equities in other Asian markets saw cautious gains in a rebound a day after a global sell-off, though investors remained cautious contemplating the implications of a potential imminent Russian invasion of Ukraine. MSCI's broadest index of Asia Pacific shares outside Japan was up 0.1 percent at the last count.

China's Shanghai Composite was up 0.4 percent, Hong Kong's Hang Sang flat and Japan's Nikkei 225 down 0.3 percent.

S&P 500 futures were up 0.3 percent. On Monday, two of the three main Wall Street indices fell about half a percent each, and the technology stocks-heavy Nasdaq Composite finished flat.

What to expect on Dalal Street

HDFC Securities' Shetti is of the view that the Nifty's near-term trend is sharply negative. The overall negative pattern and a decisive breach of important support could indicate the continuation of a downtrend ahead, he said.

He sees levels around 16,500 as the initial downside target to be watched, followed by 16,200, which could be achieved in the next couple of weeks. "Any attempt of a pullback rally could find strong resistance around 16,950-17,000 levels," Shetti fears.

Monday’s high (17,099.5) will now be seen as immediate resistance, which, unless reclaimed by the Nifty, could be followed by selling pressure on intraday pullbacks, said Ruchit Jain, Lead Research at 5paisa.com. On the downside, he sees immediate support for the index at its 200-day exponential moving average of 16,690, and 16,580.

He suggests traders to stay light on positions and avoid aggressive moves.

Key levels to watch out for

Nifty50: Rahul Sharma, Co-Founder of Equity99, expects 16,745 to act as strong support, a level, if breached, might lead to 16,620 and 16,500 as the next cushions.

He sees strong resistance at 16,900, which, if taken out, might lead to 17,070 and then 17200 as next hurdles.

Bank Nifty: Strong support for the banking index is expected at 36,600, followed by 36,400 and then 32,645, according to Sharma, who expects strong resistance at 37,070, followed by 37,300 and then 37,500.

FII/DII activity

Foreign funds have been deserting Indian stocks at a brisk pace amid mounting concerns over the prospects of a likely hike in US rates, said Chouhan.

Foreign institutional investors (FIIs) net sold Indian equities worth Rs 4,253.7 crore on Monday, though domestic institutional investors (DIIs) made net purchases of Rs 2,170.3 crore, according to provisional exchange data.

Call/put open interest

Exchange data shows the maximum call open interest is accumulated at 17,500, with 1.5 lakh contracts, and the next at 17,600, with 1.1 lakh contracts. On the other hand, the maximum put open interest is at 16,000, with almost 79,250 contracts, and the next highest at 16,500, with nearly 62,300 contracts.

This suggests a major hurdle in the 17,500-17,600 zone, and immediate support only at 16,500.

Long build-up

Here are three stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:

Long unwinding

(Decrease in open interest as well as price)

Short-covering

(Increase in price and decrease in open interest)

Short build-up

(Increase in open interest and decrease in price)

52-week highs

Two stocks in the BSE 500 basket hit 52-week highs: ONGC and Rhi Magnesita.

52-week lows

As many as 12 stocks on the bourse's broadest index hit 52-week lows, including HDFC, HDFC Life, Lupin, Bajaj Consumer, ICICI Lombard General, IGL and Solara Active.

(Edited by : Abhishek Jha)

First Published:Feb 14, 2022 7:12 PM IST