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Indian equity benchmarks touched fresh three-month peaks on Friday, surging for the third session in a row, led by gains across most sectors. Financial, oil & gas and IT shares were the biggest contributors to the rise in both headline indices.

Hopes of less aggressive rate hikes by the Fed in the coming months than anticipated earlier boosted the sentiment globally.

What do the charts suggest for Dalal Street?

The Nifty50 has formed a long bull candle on the daily chart with a gap-up opening, after taking out crucial resistance at 16,800, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

He believes the underlying trend in the 50-scrip index is sharply positive.

Momentum intact

The index's move beyond 17,000, a psychologically important level that coincides with its 200-day simple moving average, is an encouraging sign for the bulls, Angel One Chief Analyst-Technical and Derivatives Sameet Chavan told CNBCTV18.com.

He is of the view that one can expect the momentum to continue as long as the gap area of 17,018-16,948 is not challenged or filled.

Dalal Street may see some consolidation ahead but the undertone in the broader markets is expected to remain strong, he asserted.

Here are key things to know about the market ahead of the August 1 session:

SGX Nifty

On Monday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — rose as much as 58 points or 0.3 percent to 17,289.5 ahead of the opening bell on Dalal Street.

Global markets

Equities in other Asian markets were a mixed bag, with MSCI's broadest index of Asia Pacific shares outside Japan down 0.4 percent early on Monday. Japan's Nikkei 225 was up 0.4 percent but China's Shanghai Composite down 0.3 percent and Hong Kong's Hang Seng down 0.8 percent.

S&P 500 futures were down 0.4 percent, suggesting a weak start ahead on Wall Street. On Friday, the three main US indices jumped 1-2 percent each.

What to expect on Dalal Street

HDFC Securities' Shetti expects the Nifty50 index to reach levels of 17,600-17,800 in the next few weeks but warns that minor downward corrections or consolidations cannot be ruled out. "Important support is placed at 16,950-16,800 levels," he said.

Important levels to track

In a bullish signal, both the Nifty50 and the Nifty Bank remain to stay at least six percent above their long-term simple moving averages.

Chavan sees 17,380 followed by 17,450 as immediate levels to watch out for this week.

FII/DII activity

Call/put open interest

The maximum call open interest is accumulated at the strike price of 17,600, with nearly 98,000 contracts, and the next highest at 18,000, with 94,000 contracts, according to exchange data. On the flipside, the maximum put open interest is at 17,000, with 1.2 lakh contracts, and 16,900, with 94,000 contracts.

This suggests strong resistance at 17,600 and an immediate base at 17,000.

Long build-up

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

Long unwinding

(Increase in price and decrease in open interest)

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 19 stocks on the BSE 500 — the broadest index on the bourse —touched the milestone:

52-week lows

No stock in the 500-scrip pack hit a 52-week low.

First Published:Jul 31, 2022 8:26 AM IST