The Nifty 50 index began the new year on a positive note, ending the first trading session of the year near the day's high. Gains were mainly led by the heavyweights - Reliance Industries, ICICI Bank, Infosys and HDFC. Metals were the outperformers of the session courtesy a brokerage upgrade. However, all of this took place on tepid volumes as participation remains low due to the new year holidays.

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With Monday's move, the index has oscillated between gains and losses for the last five trading sessions. Since December 16, the Nifty 50 has moved in a 400 point range of 18,000 on the downside and 18,400 on the upside. That has narrowed further in the last seven sessions to 17,900 on the downside and 18,200 on the upside.

Saurabh Mukherjea of Marcellus Investment Managers said that when it comes to investing in quality companies, one should not lose much sleep on where will India's GDP be at, or where will the Sensex end the year at. "I think that sort of stuff of forecasting, crystal ball gazing has very little role to play in serious investing," he said, adding that there is no other asset class that can create wealth other than high quality stocks.

What do the charts suggest for Dalal Street?

Ruchit Jain of 5paisa.com believes that the short-term momentum on the Nifty 50 has turned positive again after the momentum readings have given a positive crossover after a pullback from its retracement support levels. However, he wants to see the Nifty 50 breakout and sustain above 18,265, which is not only last week's high, but also the 20-day moving average. A breakout above those levels can take the index to 18,330 and 18,460.

The Nifty Bank index ended over 200 points higher on Monday, starting the year on a positive note as well. At 43,200, the index managed to hold the crucial downside support of 43,000. Kunal Shah of LKP Securities sees upside resistance for the index at 43,500, a break above which can take the index further up towards levels of 44,000 and even 45,000. "The momentum indicators are in the strong buying zone which confirms the strength of the index," he said.

Here are key things to know about the market ahead of the January 03 trading session:

SGX Nifty

On Tuesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — gained 63 points or 0.35 percent to 18,286, thereby pointing to a positive opening for the market.

Global Markets

Asian markets are trading lower this morning even as those in Japan and New Zealand remain shut due to the new year holiday. South Korea's Kospi is trading 0.9 percent lower while the Kosdaq is down 0.3 percent.

Wall Street remained shut on Monday on account of the new year holiday. However, futures indicate that 2023 may begin on a positive note there as well as the Dow Futures are trading with gains of over 200 points on last count. Minutes of the last US Federal Reserve meeting and jobs data for the month of December will be some of the key monitorables to watch out for in the US this week.

What to expect on Dalal Street

Nagaraj Shetti of HDFC Securities observed a reasonable positive candle forming on the daily chart of the Nifty 50 besides the long negative candle of Friday's session. Similar to Jain, he wants the Nifty 50 to move decisively above 18,265 to negate the bearish pattern of the dark cloud cover formed on Friday. A sustained move above that level can take the index towards levels of 18,500 in quick time. He sees downside support at levels of 18,080.

5paisa's Jain does not see a significant directional move in the Nifty 50 in the near term, but finds stock specific moves to provide good trading opportunities. 18,080 and 18,000 are supports for the index on the downside, according to him.

Key levels to watch out for

For the Nifty 50 weekly options expiry on January 05, the 18,400 strike call added 5.4 lakh shares in Open Interest, while the 18,500 call added 5.1 lakh shares. The 18,300 call also saw addition of close to 1.6 lakh shares.

On the downside, the 18,000 put added 30.3 lakh shares in Open Interest, while the 18,100 put and the 17,900 put added 21 lakh and 15 lakh shares in Open Interest respectively.

No stocks are currently in the F&O Ban period.

FII/DII activity

Foreign Investors sold stock worth Rs 213 crore in cash on Monday while domestic investors bought worth Rs 743 crore.

Long build-up (Increase in price and Open Interest)

Short build-up (Decrease in price and Increase in Open Interest)

Also Read: Stocks to Watch: ONGC, Zomato, Mahindra and Mahindra Finance, Karnataka Bank, CSB Bank, HFCL and more

First Published:Jan 3, 2023 5:07 AM IST