After rallying for 1,000 points at breakneck speed, the Nifty 50 is in pause mode over the last two trading sessions. Consolidation over Monday and Tuesday has seen the index give up nearly 160 points from Friday's closing.

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A positive here is that despite the downmove, the Nifty 50 index closed above Monday's low of 17,574.

Most of the losses on the Nifty 50 index came from Reliance Industries, followed by names like Power Grid, UltraTech and Apollo Hospitals. All 10 Adani Group companies also ended lower on Tuesday. IT shares saw some rebound after Monday's sell-off, as did real estate shares.

Broader markets continue to outperform the Nifty 50 index. The Nifty Midcap index gained 0.8 percent on Tuesday and has outperformed the benchmarks for at least four sessions in a row. The Midcap index has gained in 10 out of the last 11 trading sessions.

Earnings season has taken a pause for today with no major Nifty 50 company reporting results. Broader market names like ICICI Securities and Mastek will report results today.

Anil Sarin of Centrum PMS told CNBC-TV18 that there is a sector rotation taking place out of IT into Pharma which now appears to be a low-risk bet after being beaten down so much. "March was full of bad news and if you have a bad start, then it's not the best thing to have happened," he said. Among sectors, Sarin expressed optimism on healthcare, BFSI and chose auto ancillaries over autos.

What do the charts suggest for Dalal Street?

The pullback over the last two days is only making the Nifty 50 chart structure more robust as the quality of the upmove has been better than the past, Rahul Sharma of JM Financial told CNBC-TV18. He called the market a buy-on-dips one, adding that 17,500 will be a key support over the next few sessions. He expects the Nifty 50 to touch levels of 18,200 in the April series itself. "This move has long legs and we should be headed towards 18,200 anytime soon.

However, Jai Bala of cashthechaos.com has a differing view. He told CNBC-TV18 that the recovery from the March 20 lows of 16,828 is most probably done and that the Nifty 50 index will find resistance at levels of 17,840 on the upside. He continues to maintain that 17,502 is a key level on the downside for the Nifty 50, followed by 17,428.

The broader index trend remains positive and one should have a buy-on-dips approach as long as the Nifty 50 index remains above 17,600, said Kunal Shah of LKP Securities. He alluded to the index closing above Monday's low as a positive sign for today's trading session.

Here are key things to know about the market ahead of the trading session on April 19:

SGX Nifty

On Wednesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — declined 35 points or 0.2 percent to 17,686.5, thereby pointing to a slightly negative opening for the market.

Global Markets

Asian equities have opened mixed this morning as Fed officials appear divided on the quantum of future rate hikes.

The Nikkei 225 index and the Topix are trading with minor losses, while the Kospi is up 0.25 percent. The ASX 200 is trading 0.1 percent higher.

Benchmark indices on Wall Street had a choppy session with all three indices closing little changed but off the day's high.

In earnings, Netflix delayed plans to crack down on password sharing. The stock though, did not see a significant reaction post its quarterly earnings. Tesla will be reporting results after the bell today.

What to expect on Dalal Street

Rohan Patil of SAMCO Securities said that the breakout of the falling channel pattern is still valid for the Nifty 50, keeping the near-term trend positive to sideways. The validity of that bullish pattern lies above 17,500, which he considers an immediate support for the index.

While the short-term trend of the Nifty 50 index is choppy, the medium-term uptrend is intact, said Nagaraj Shetti of HDFC Securities. He expects the consolidation to continue for another 1-2 sessions, before the index resumes its upside momentum from the lows. Immediate support lies between 17,600 - 17,500, according to Shetti.

LKP's Shah observed that the Nifty Bank index is stuck in a broad range between 42,000 - 42,500 and will remain in buy-on-dips mode as long as it remains above 42,000. A break below that can take the index lower towards 41,500.

Key Levels To Watch

For tomorrow's weekly options expiry, the 17,700 strike call of the Nifty 50 index added 42.2 lakh shares in Open Interest, followed by the 17,900 call, which added 30.57 lakh shares.

Open Interest addition was also seen in the 17,800 call (27.8 lakh shares), 17,750 call (24.7 lakh shares) and 17,650 call (23.2 lakh shares).

On the downside, the 17,400 put added nearly 19.5 lakh shares in Open Interest, followed by the 17,650 put, which added 17.7 lakh shares. Addition was also seen in the 17,500 put (16.9 lakh) and 17,550 put (13.1 lakh).

Nifty 50's put-call ratio is currently at 0.82 from 0.93 on Monday. Delta Corp and Balrampur Chini continue to remain in the F&O ban.

FII/DII activity

Long Build-Up (Increase In Price and Open Interest)

Short Build-Up (Decrease In Price and Increase In Open Interest)

Short Covering (Increase In Price and Decrease In Open Interest)

First Published:Apr 19, 2023 5:50 AM IST