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Indian equity benchmarks finished a volatile session in the red on Wednesday, dragged by IT and FMCG shares though gains in financial shares limited the downside.

The India VIX — known in market parlance as the fear index — rose 1.8 percent to 20.9.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a small negative candle on the daily chart with upper and lower shadows, suggesting high volatility, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

However, the predictive value of this pattern could be less given its placement within a range, he said.

16,450 a key level

For traders, 16,450 will act as strong support, with the strong possibility of a fresh pullback rally if the 50-scrip index manages to keep above it, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

As long as it stays above that support zone, it can reach levels of 16,650-16,700, but below it, its uptrend will be vulnerable with high chances of a decline to the 16,350-16,325 band, he said.

Here are key things to know about the market before the June 2 session:

SGX Nifty

Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — declined as much as 82.5 points or 0.5 percent to 16,425.5 early on Thursday, suggesting a lower start ahead on Dalal Street.

Global markets

Equities in other Asian markets fell on Thursday as incoming data triggered concerns that the Fed may not deviate from its course towards aggressive hikes in pandemic-era rates. MSCI's broadest index of Asia Pacific shares outside Japan was down 1.2 percent at the last count.

Japan's Nikkei 225 was down 0.3 percent, China's Shanghai Composite 0.6 percent, Hong Kong's Hang Seng 1.8 percent, South Korea's KOSPI two percent and Singapore's Straits Times 0.3 percent.

S&P 500 futures eked out a gain of 0.1 percent. On Wednesday, Wall Street's three main indices closed 0.5-0.8 percent lower.

What to expect on Dalal Street

HDFC Securities' Shetti believes the Nifty's near-term remains intact, and any consolidation or minor weakness could be considered an opportunity to buy the dips in the short term.

"The market could shift in to another one or two sessions of rangebound moves or minor weakness before staging a sharp bounce from the lows. The near-term upside target remains intact at 16,800 levels," he said.

Important levels to track

The Nifty50 is almost 750 points below its long-term simple moving average.

Mohit Nigam, Head-PMS at Hem Securities, identified the following resistance and support levels:

FII/DII activity

Call/put open interest

The maximum call open interest is accumulated at the strike price of 17,000 with 3.3 lakh contracts, and the next highest at 16,800, with 1.6 lakh, according to exchange data.

On the other hand, the maximum put open interest is at 16,000, with 1.5 lakh contracts, and at 16,200, with almost 89,000.

This suggests immediate resistance at 16,800 followed by the 17,000 hurdle, and immediate support at 16,200.

Long build-up

Here are five stocks that saw an increase in open interest as well as price:

Long unwinding

(Decrease in open interest as well as price)

Short covering

(Increase in price and decrease in open interest)

Short build-up

(Decrease in price and increase in open interest)

52-week highs

A total of 10 stocks on the BSE 500 — the broadest index on the bourse — touched the milestone:

52-week lows

On the other hand, three hit 52-week lows: IPCA Labs, Tasty Bite and Hikal.

First Published:Jun 1, 2022 9:18 PM IST