Indian equity benchmarks scaled 11-week closing highs on Monday amid broad-based gains led by the HDFC twins, which jumped after the companies announced a mega-merger. Globally, news flow on the Russia-Ukraine war -- which is in its sixth week -- kept investors on the back foot.

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What do the charts suggest for Dalal Street now?

The Nifty50 has confirmed the breakout of a bullish engulfing pattern and moved above its prior swing highs, according to Sachin Gupta, AVP-Research at Choice Broking. (Check out key factors to track this week)

"The index has sustained above its 50-day exponential moving average and showed a positive crossover in MACD and Stochastic (momentum indicators), suggesting a bullish move in the near term," he said.

Profit booking possible

Kotak Securities Head of Equity Research (Retail) Shrikant Chouhan pointed out that the 50-scrip index is holding an uptrend formation on the daily chart. However, he also said that due to its overbought texture, traders may prefer to book some profit at higher levels.

Here are key things to know about the market before the April 5 session:

SGX Nifty

At 7:38 am on Tuesday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were up 90 points or 0.5 percent at 18,187, suggesting a gap-up start ahead. Earlier in the day, the futures rose as much as 109 points.

Global markets

Equities in other Asian markets were mixed as caution persisted among investors over geopolitical uncertainty. MSCI's broadest index of Asia Pacific shares outside Japan was barely in the green in early hours.

Hong Kong's Hang Seng surged 2.1 percent. Japan's Nikkei 225 and South Korea's KOSPI were down 0.1 percent each. Singapore's Straits Times was up 0.4 percent. China's Shanghai Stock Exchange was closed for holidays.

S&P 500 futures were down 0.1 percent. On Monday, the three main Wall Street indices moved higher led by tech and growth stocks. The S&P 500 rose 0.8 percent, the Dow Jones 0.3 percent and the technology stocks-heavy Nasdaq Composite 1.9 percent.

What to expect on Dalal Street

There are no signs of a reversal in the index and one should avoid contrarian bets on the index for now. That is the view coming in from Ruchit Jain, Lead Research at 5paisa.com. However, he added that momentum readings on the lower timeframe are in an overbought zone.

He suggests traders look to book some profits on long positions and wait for a better risk-reward setup.

Jain sees crucial hurdles around 18,135 and 18,350, and immediate support around 17,775 and 17,500.

Levels to watch out for

Kotak Securities' Chouhan expects 17,880 to act as crucial support for trend-following traders, a level above which he feels the index may reach the 18,150-18,200 band. On the flip side, a quick intraday correction to retest 17,790-17,750 levels is not ruled out if it slips below 17,880, he added.

Choice's Gupta pointed out the following levels:

FII/DII activity

Net purchases of Indian shares by foreign institutional investors (FII) stood at Rs 1,152.2 crore on Monday, and by domestic institutional investors (DIIs) at Rs 1,675 crore, according to exchange data.

Call/put open interest

Provisional exchange data shows the maximum call open interest is accumulated at the strike price of 18,500, with 1.2 lakh contracts, and 19,000 with 1.1 lakh contracts. On the other hand, the maximum put open interest is placed at 17,500 and 17,000, with 1.2 lakh contracts each, and the next highest at 18,000, with 1.1 lakh contracts.

This suggests a major hurdle awaits the index at 18,500 and a significant cushion after immediate support at 18,000 is only available at 17,500.

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

52-week highs

A total of 20 stocks on the BSE 500 -- the bourse's broadest index -- hit 52-week highs, including Vedanta, Adani Enterprises, Adani Power, Adani Total, Adani Green, HAL, JSPL, PowerGrid, Cummins, Delta Corp, JK Paper, Linde and RCF.

52-week lows

No BSE 500 stock hit a 52-week low.

Fear gauge

The India VIX -- also known as the fear index -- eased 2.9 percent to 17.9 on Monday. In late February, Russia's move to invade Ukraine had pushed the VIX to a 20-month peak of almost 34.

(Edited by : Abhishek Jha)

First Published:Apr 4, 2022 8:18 PM IST