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Indian equity benchmarks halted a two-day winning run on Friday dragged by financial, IT, oil & gas and metal shares, amid weakness across global markets as concerns resurfaced about aggressive hikes in COVID-era interest rates.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a long negative candle on the daily chart, with a minor negative sequence of lower tops and lower bottoms, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

"On the weekly chart, it formed a doji type candle pattern at the valuation support of the 17,150 level. Normally, the formation of a doji after a reasonable decline or upmove signals an impending reversal after confirmation. This could bring some hopes for bulls to make a comeback from the lows in the coming week," he said. (Check out key factors and events to track this week)

Important support

A bullish pattern at the support level of 16,800 does give more credence to the underlying price structure, said independent technical analyst Manish Shah. "Going in into the last week of April F&O series, the market is expected to show a bullish undertone," he said. The month's derivative contracts are due for expiry on April 28.

Here are key things to know about the market before the April 25 session:

SGX Nifty

At 7:38 am on Monday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were down 221 points or 1.3 percent at 16,959, suggesting a gap-down opening ahead on Dalal Street.

Global markets

Equities in other Asian markets dropped as concerns persisted about aggressive rate hikes after the Fed's hawkish commentary. MSCI's broadest index of Asia Pacific shares outside Japan was down 1.8 percent at the last count.

Japan's Nikkei 225 was down 1.9 percent, China's Shanghai Composite 2.2 percent, Hong Kong's Hang Seng 2.5 percent, South Korea's KOSPI 1.6 percent and Singapore's Straits Times 0.5 percent.

S&P 500 futures were down 0.8 percent. On Friday, the three main Wall Street indices tanked as surprise earnings news and increased certainty around aggressive near-term rate increases took a toll on investors. The S&P 500 and the Dow Jones fell 2.8 percent each, and the technology stocks-heavy Nasdaq Composite plummeted 2.6 percent.

What to expect on Dalal Street

HDFC Securities' Shetti believes that the 50-scrip index's short-term trend has reversed to negative after a reasonable upside of two days. The overall chart pattern indicates that levels of 17,000-16,800 could offer support this week to show a decisive bounce from the lows, he said.

It is important for the Nifty50 to take out 17,450 to continue to 17,650 followed by 18,100, said independent technical analyst Manish Shah. A break below the support area around 16,800 could see a steady decline to 16,400, he warned.

Levels to watch out for

Sumeet Bagadia, Executive Director at Choice Broking, highlighted the following levels to watch out for:

FII/DII activity

Foreign institutional investors (FII) net sold Indian shares worth Rs 2,461.7 crore on Friday, according to provisional exchange data. However, domestic institutional investors (DIIs) made net purchases of Rs 1,602.4 crore.

Call/put open interest

Data shows that the maximum call open interest is accumulated at the strike of 18,000, with 2.2 lakh contracts, followed by 17,500, with 1.1 lakh contracts. The maximum put open interest is at 17,000, with 1.2 lakh contracts.

This suggests resistance at 17,500 followed by the 18,000 hurdle, and meaningful support at 17,000.

Long build-up

Here are three 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 11 scrip on the BSE 500 -- the broadest index on the stock exchange -- hit 52-week highs:

52-week lows

No BSE 500 stock hit a 52-week low.

Fear gauge

The India VIX -- known in market parlance as the fear gauge -- rose 2.8 percent to 18.4 on Friday. In late February, Russia's move to invade Ukraine had sent the VIX soaring to almost 34.

First Published:Apr 24, 2022 10:08 PM IST