Indian equity benchmarks continued to rise on Monday after taking a day's breather, led by IT and select financial stocks, especially private sector banks. Nifty50 reclaimed the 16,250 mark once again, coming about half a percent of its lifetime high registered last week.

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So, what do the charts suggest for Dalal Street?

Nifty50 formed a doji candle pattern on the daily chart which represents indecision in the market, according to Rohit Singre, Senior Technical Analyst at LKP Securities.

Buy on dips opportunity?

"After a sharp upside breakout of the broader high-low range at 16K levels recently, the underlying shifting into a narrow range movement without showing any major decline could be considered as a breather pattern, and this action indicates a buy-on-dips opportunity near 16,100-16,200 levels," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Time to be a level-based trader

"The market is entering a complex corrective pattern, which would keep the trend volatile in a wide range of 16,350-16,150 levels. Beyond 16,350, Nifty would rise to 16,450. On the other hand, a break of 16,150 would take the market to the 16,000 level. Become a level-based trader," said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

Here are key things to know about the market before Tuesday's session:

SGX Nifty

SGX Nifty futures trading on Singapore Exchange -- an early indicator of the NSE Nifty50 benchmark index in India -- were last seen trading 27 points or 0.17 percent lower at 16,245.00 early on Tuesday, indicating a negative start ahead on Dalal Street.

What to expect

"Nifty's short-term trend remains choppy. The recent upside breakout of broader range is still intact. The present consolidation/minor weakness is unlikely to damage the sentiment post-upside breakout," said HDFC Securities' Shetti.

He expects the index to show a sharp bounce again from near the support of 16,100 in the next couple of sessions. "A decisive move above 16,350 could push Nifty towards 16,500 in the near term," he adds.

Global markets

Equities in other Asian markets declined amid concerns over the spread of the Delta variant of the coronavirus. MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.4 percent. Japan's Nikkei was up 0.9 percent. Oil recovered after falling as much as 4 percent on Monday, with Brent at $69.29, up 0.36 percent. Wall Street suffered mild losses overnight. MSCI's gauge of stocks across the globe was down 0.03 percent.

Call/put open interest

The maximum call open interest is at the strike price of 16,300, and then 16,400. On the other hand, the maximum put open interest is concentrated at the strike price of 16,200, and next only at 16,000, according to data from NSE. This indicates that immediate resistance can be expected at the 16,300 mark, followed by 16,400, and support at 16,200-16,000.

Key levels to watch out for

Nifty50: The level of 16,200 looks like an immediate and good support zone going forward, followed by 16,100. If the index holds above these levels, it will mean the structure is positive, which can push it to its immediate hurdle zone at 16,320-16,400, according to LKP's Singre.

Going forward, 16,220 will act as immediate support, followed by 16,130 and 16,075; similarly, levels of 16,300-16,350-16,430 will act as resistance, according to Rahul Sharma, Co-Founder, Equity99.

Nifty Bank: The banking index has support at 35,900, followed by 35,600, and resistance above 36,200-36,500 levels, according to Sharma.

Long build-up

Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:

Long unwinding

(Decrease in open interest and price)

Short build-up

(Increase in open interest and a decrease in price)

Short-covering

(Decrease in open interest and an increase in price)

Volatility gauge

India VIX index -- which gauges the expectation of volatility in the market in the short term -- is flat at 12.61, having moved within a 12.03-13.11 range on Monday.

FII/DII flow

Foreign institutional investors brought in a net Rs 211.91 crore into the Indian capital market on Monday, but net sales by domestic institutional investors stood at Rs 716.15 crore, exchange data showed.

Earnings to watch

Coal India, Lupin, Trent, Reliance Infrastructure, VMart, Manappuram Finance, Jindal Steel & Power, Motherson Sumi, Godrej Agro, Deepak Fertilisers and Zomato are scheduled to report their earnings for the quarter ended June 30 on Tuesday. Infibeam Avenues, IRB Infrastructure, IFCI, Prestige, Siemens, Wonderla, Tribhovandas Bhimji Zaveri and 3i Infotech, Ashoka Buildcon, Century Plyboards and Eveready are also among the companies due to post their quarterly numbers on the same day.

(Edited by : Abhishek Jha)

First Published:Aug 9, 2021 8:23 PM IST