Indian equity benchmarks soared three percent in a strong rebound on Monday, recovering all of their losses on the previous day, as investors globally cheered easing of Russia-Ukraine tensions.

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NSE

For the Nifty50, it was the biggest surge in more than a year, following Monday's slump, which was its worst in 10 months.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a long bull candle on the daily chart, reflecting a counter attack by the bulls, and completely filling Monday's huge gap down, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

Crucial resistance awaits the 50-scrip index at 17,640, he said. "Sustaining above the lower tops of the past 8-9 sessions could negate a short-term bearish setup for the index," he added.

Danger zone

The Nifty is signalling the continuation of a pullback rally in the near term but is below its 50-day simple moving average in a largely negative sign, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

"As long as it is trading above 17,200, the uptrend texture will continue till the immediate hurdle of 17,450-17,550 levels. On the flipside, a quick intraday correction is not ruled out if it trades below 17,200, which could be followed by 17,100-17,050 levels.

Here are key things to know about the market before the February 16 session:

SGX Nifty

At 7:40 am on Wednesday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were up 23 points or 0.1 percent at 17,371, suggesting a mildly positive start ahead on Dalal Street.

Global markets

Equities in other Asian markets rose as fears of a Russian invasion of Ukraine dissipated. Moscow indicated it was returning some troops to base from exercises. MSCI's broadest index of Asia Pacific shares was up one percent at the last count.

Japan's Nikkei 225 was up 2.1 percent, China's Shanghai Composite 0.8 percent and Hong Kong's Hang Seng 1.1 percent.

S&P 500 futures, however, were down 0.3 percent. On Tuesday, the three main Wall Street indices ended 1.2-2.5 percent higher amid a risk-on session, though energy shares dipped on a fall in crude oil.

What to expect on Dalal Street

Accoding to independent technical analyst Manish Shah, buyers may have managed to take full control of the market, but the Nifty will remain volatile unless it breaks out of the 16,800-17,800 range on either side.

"The index should see a rally to major resistance at 17,600-17,750, and at least trade above 17,600 within the coming two days," he said.

HDFC Securities' Shetti sees immediate support for the index at 17,200, and feels that its sustainability at higher levels will be important. He fears that any drop below the last lower top of 17,640 could bring the bears into action.

Key levels to watch out for

Palak Kothari, Research Associate at Choice Broking, has identified the following zones:

FII/DII activity

Foreign institutional investors (FIIs) net sold Indian equities worth Rs 2,298.8 crore on Tuesday, according to provisional exchange data. However, domestic institutional investors (DIIs) saved the day, making net purchases of Rs 4,411.6 crore

Call/put open interest

Exchange data shows the maximum call open interest is accumulated at 17,700, with 1.3 lakh contracts, followed by 17,500 and 18,000, with 1.2 lakh each. On the other hand, the maximum put open interest is at 17,000, with 1.3 lakh contracts.

This suggests immediate resistance at 17,500, followed by the hurdles of 17,700 and 18,000, and meaningful support only at 17,000.

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 as well as price)

Short-covering

(Increase in price and decrease in open interest)

Short build-up

(Increase in open interest and decrease in price)

52-week high

Only one stock in the BSE 500 basket hit a 52-week high: Rhi Magnesita.

52-week lows

As many as 34 stocks on the index -- the broadest gauge on the bourse -- hit 52-week lows, including HDFC, HDFC Life, BPCL, ICICI Lombard General, Manappuram, Lupin, SpiceJet, MRF, Rallis and Solara Active.

Volatility index

NSE's India VIX index -- which gauges the expectation of volatility in the near term -- cooled off 10.3 percent to 20.6 on Tuesday, a day after its biggest jump in 11 weeks.

(Edited by : Abhishek Jha)

First Published:Feb 15, 2022 7:31 PM IST