Indian equity benchmarks managed to scale new record highs on Monday, helped by sharp gains in metal and consumer goods shares. However, losses in automobile, pharma and PSU banking shares limited the upside in a volatile session. Nifty Bank moved in a narrow range around the flatline before ending down 0.21 percent.

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So, what do the charts suggest for Dalal Street?

Nifty50 formed a small bullish candle on the daily chart, continuing to march forward, said Rohit Singre, Senior Technical Analyst at LKP Securities. "Traders can use the dip to make fresh longs near the good support zone near 16,500-16,440 and avoid making longs on fresh highs as the risk-reward ratio will not be favourable," he said.

Buy on dips opportunity

"Nifty is currently outperforming compared to most of global markets and is currently sustaining the highs without showing any damage to its underlying trend... The near- and long-term uptrend remains intact for Nifty going by the daily and weekly charts... Further consolidation or any correction in the market is going to be a buy-on-dips opportunity," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

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

SGX Nifty

Nifty futures trading on Singapore Exchange -- an early indicator of the NSE Nifty50 benchmark index in India -- traded down 28 points or 0.17 percent at 16,535 at 8:04 am, signalling a weak start ahead on Dalal Street.

Global markets

Equities in other Asian markets fell amid the continued spread of new Covid-19 variants and its impact on the global economy. MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.4 percent. A turmoil in Afghanistan eclipsed overnight strength on Wall Street. S&P 500 futures traded 0.18 percent lower, indicating a negative start ahead in the US, a day after two of the three major Wall Street indices hit record highs.

What to expect

"As long as the index is trading above the key support zone of 16,450-16,400, the uptrend texture is likely to continue up to 16,600-16,640 levels. In the near future, the market may consolidate near the 16,600 resistance level," said Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities.

"There is a possibility of the index showing consolidation or minor weakness in the next 1-2 sessions, before showing further upside in the near term. The next upside target remains intact at 16,800 and immediate support at 16,480," added HDFC Securities' Shetti.

Key levels to watch out for

Nifty50: "We feel the market is on the verge of taking a break. Based on option statistics, support has moved to 16,480-16,450 levels. Resistance would be at 16,590 and 16,650," said Chouhan.

Nifty Bank: The banking index is still consolidating in the 35,800-36,200 zone with 36,500 being the next critical hurdle, according to Santosh Meena, Head of Research, Swastika Investmart. Immediate support will be at 35,500, and critical support in the 35,200-35,000 zone, Meena said.

Call/put open interest

There is a high concentration of the call open interest at the strike price of 16,800 . On the other hand, the maximum put open interest is at the strike prices of 16,500 and 16,400, and then 16,300, NSE data shows. This indicates that resistance can be expected at 16,800, and support comes in at 16,500, and then 16,400.

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-covering

(Decrease in open interest and increase in price)

Short build-up

(Increase in open interest and decrease in price)

Stocks hitting 52-week highs

Bharti Airtel, HCL Tech, Larsen & Toubro, Sun Pharma Advanced Research, Birlasoft, Tata Chemicals, Cummins, DMart, Allcargo Logistics, Apollo Hospitals, Bajaj Holdings, Fortis, Gujarat State Petronet, KPIT Technologies and Star Cement were among the stocks that clocked 52-week highs.

Stocks hitting 52-week lows

Aurobindo Pharma, Hero MotoCorp, Yes Bank, Gulf Oil Lubricants, Grandeur Products, Future Market Networks, Negotium International Trade and Suryoday Small Finance Bank hit 52-week lows.

Volatility gauge

India VIX index -- which measures the expectation of volatility in the market -- soared 3.59 percent to 13.46, having risen as much as 5.16 percent during Monday's session.

FII/DII flow

Foreign institutional investors withdrew a net Rs 1,088.32 crore from the Indian capital market on Monday. On the other hand, net purchases by domestic institutional investors stood at Rs 506.21 crore, exchange data showed.

Earnings to watch

Amtek Auto, Opto Circuits, EKI Energy Services, Kennametal India, BF Investment ARSS Infrastructure Projects and Terai Tea are slated to report their quarterly results this week.

(Edited by : Abhishek Jha)

First Published:Aug 16, 2021 7:14 PM IST