Indian equity benchmarks extended gains to a third straight session on Tuesday, led by IT, financial and oil & gas shares. Losses in metal shares played spoilsport, limiting the upside.

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NSE

The Nifty IT gained one percent -- its biggest rise in a week -- as investors awaited quarterly numbers from TCS, Infosys and Wipro due on Wednesday.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a reasonable long candle on the daily chart, suggesting rangebound action with a positive bias, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

"The index's near-term trend remains intact with the pattern of higher highs and higher lows being active on the daily chart," he said. Any decline can be a buying opportunity and a sharp downward move is unlikely in the short term, he added.

One step closer to peak

Lots of opportunities are likely on the buy side as long as the 50-scrip index stays above 17,721, said Prashanth Tapse, Vice President (Research) at Mehta Equities. "An immediate goalpost for the Nifty is seen at 18,307, followed by aggressive targets at its all-time high of 18,605 (October 19)," he added.

Here are key things to know about the market before the January 12 session:

SGX Nifty

At 7:39 am on Wednesday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty50 index -- were up 110.5 points or 0.6 percent at 18,201.5,, suggesting a gap-up opening ahead on Dalal Street.

Global markets

Equities in other Asian markets jumped tracking overnight gains on Wall Street, after Federal Reserve Chair Jerome Powell's testimony to Congress did not bring any major surprises for investors globally. MSCI's broadest index of Asia Pacific shares outside Japan was up 0.9 percent at the last count.

Japan's Nikkei 225 was up 1.8 percent, China's Shanghai Composite 0.2 percent and Hong Kong's Hang Seng 1.6 percent.

S&P 500 futures were flat in Asia. On Tuesday, the three main Wall Street indices closed 0.5-1.4 percent higher.

What to expect on Dalal Street

HDFC Securities' Shetti believes more upside is on the cards but rangebound movement can continue for 1-2 sessions. He feels there is a possibility of more volatility.

"Eventually, the index could break above crucial resistance at around 18,200 in the near term, with immediate support at 17,950," he added.

Levels of 18,400-18,500 are possible in the Nifty after yet another strong day, said Manish Hathiramani, Proprietary Index Trader and Technical Analyst at Deen Dayal Investments.

Strong support lies at 17,700 and as long as that holds, any corrective wave can be looked at strategically to accumulate long positions," he said.

Key levels to watch out for

Nifty50: The 50-scrip index has support at 17,700 and resistance at 18,100, according to Palak Kothari, Research Associate at Choice Broking. A breach of the hurdle can lead to 18,200-18,300 levels, she said.

Bank Nifty: For the banking index, she sees support at 37800 and resistance at 38,800.

FII/DII activity

Foreign institutional investors (FIIs) net purchased Indian equities worth Rs 111.9 crore on Tuesday, and domestic institutional investors Rs 378.7 crore, according to provisional exchange data.

Call/put open interest

Exchange data shows the maximum call open interest is accumulated at the strike price of 18,500, with 1.1 lakh contracts, and the next highest at 18,400, with one lakh. Also, the maximum put open interest is at 17,500, with nearly 97,000 contracts, and the next highest at 17,800, with almost 95,000 contracts.

This suggests major hurdles at 18,400 and 18,500 levels, and immediate support at 17,800, followed by a major cushion at 17,500.

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 highs

In the BSE 500 pack, Adani Enterprises, Adani Green, Sunteck Realty, Suzlon, Century Textiles, Greaves Cotton, Astral, KPR Mill, Poonawalla Fincorp, Prism Johnson and Affle were among the 18 stocks that hit 52-week highs.

52-week lows

No stock in the broadest index on the bourse hit a 52-week low. Newly-listed Paytm and PB Fintech were among the four other stocks that hit the trough.

Volatility gauge

NSE's India VIX index — which gauges the expectation of volatility — ended half a percent higher at 17.8 on Tuesday, having jumped as much as 3.2 percent during the session.

(Edited by : Abhishek Jha)

First Published:Jan 11, 2022 6:56 PM IST