Indian equity benchmarks clocked their highest closing levels in nearly three months on Friday, continuing a winning streak for the sixth session in a row, boosted by gains in financial stocks. Losses in select IT and oil & gas shares limited the upside.
NSE
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a small positive candle on the daily chart with minor upper and lower shadows, and appears to be approaching strong overhead resistance around 16,800, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The bulls need to be careful at the higher levels, he said.
Key support at 16,490-16,360
"The upmove in the 50-scrip benchmark last week validates our recent bullish stance on the market and the ‘buy on declines’ strategy seems to have worked well in our favour," Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One, told CNBCTV18.com.
Any decline towards sacrosanct support at Wednesday’s gap area of 16,360-16,490 is likely to be bought into, he said. Chavan expects the index to cross a swing high of 16,793 soon.
"Slowly but steadily, we would see the index eye its 200-day simple moving average zone of 16,900-17,050, which would certainly be a sigh of relief for market participants," said Chavan, who believes that although the undertone of the market remains bullish, it is advisable not to become too complacent.
Here are key things to know about the market ahead of the July 25 session:
SGX Nifty
On Monday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — fell as much as 108 points or 0.6 percent to 16,617 ahead of the opening bell on Dalal Street.
Global markets
Equities in other Asian markets were in the red on Monday, ahead of a key rate decision by the Fed this week, with MSCI's broadest index down 0.3 percent at the last count.
Japan's Nikkei 225 was down 0.8 percent, China's Shanghai Composite 0.3 percent and Hong Kong's Hang Seng 0.6 percent.
S&P 500 futures were down 0.3 percent. On Friday, the three main Wall Street indices fell as disappointing earnings from Snap spooked investors, triggering selling pressure in social media and ad tech stocks. The S&P 500 dropped 0.9 percent, the Dow Jones 0.4 percent and the tech stocks-heavy Nasdaq Composite 1.9 percent.
What to expect on Dalal Street
HDFC Securities' Shetti believes that the Nifty's short-term trend remains positive.
There is still no indication of any reversal formation at the highs, he pointed out. "But being near important overhead resistance around 16,800, there is a higher probability of downward correction emerging from the highs this week. Important weekly support is at 16,450," he said.
Important levels to track
The Nifty50 is less than two percent below its long-term simple moving average. The banking index has crossed all six of its main averages in a bullish sign.
| Period (No. of sessions) | SMA | |
| Nifty50 | Nifty Bank | |
| 5 | 16,492.9 | 35,998.2 |
| 10 | 16,269.3 | 35,475.5 |
| 20 | 16,084.8 | 34,728.4 |
| 50 | 16,070.3 | 34,427.1 |
| 100 | 16,525.8 | 35,116.3 |
| 200 | 17,051.4 | 36,422.1 |
Mohit Nigam, Head-PMS at Hem Securities, identified the following levels:
| Index | Support | Resistance |
| Nifty50 | 16,600 | 16,850 |
| Nifty Bank | 36,300 | 37,100 |
FII/DII activity
Foreign institutional investors returned to net selling Indian shares on Friday after four straight days of net buying, according to provisional exchange data.
Call/put open interest
The maximum call open interest is accumulated at the strike price of 17,000, with 1.2 lakh contracts, and the next highest at 16,800, with almost 90,000 contracts, according to exchange data.
On the other hand, the maximum put open interest is at 16,500, with 1.5 lakh contracts, and 16,000 and 15,800, with 1.1 lakh each.
This suggests immediate resistance at 16,800 followed by the 17,000 hurdle, and immediate support at 16,500.
Long build-up
Here are five stocks that saw an increase in open interest as well as price:
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| JKCEMENT | 496,000 | 2,333.60 | 1.97% | 9.22% |
| CHAMBLFERT | 3,703,500 | 320.55 | 3.20% | 4.62% |
| ABFRL | 9,830,600 | 270.3 | 0.32% | 1.80% |
| MFSL | 1,333,150 | 849.4 | 0.76% | 1.61% |
| BATAINDIA | 1,650,825 | 1,831.95 | 0.03% | 1.10% |
Long unwinding
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| CANFINHOME | 3,101,475 | 537 | -1.20% | -15.91% |
| JSWSTEEL | 36,397,350 | 583.7 | -0.52% | -15.58% |
| RBLBANK | 42,150,000 | 91.7 | -3.68% | -15.21% |
| TECHM | 21,057,600 | 1,028 | -0.39% | -13.80% |
| BAJAJFINSV | 1,042,900 | 12,695 | -0.17% | -13.46% |
(Decrease in open interest as well as price)
Short covering
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| GRASIM | 12,820,725 | 1,519.75 | 3.82% | -19.82% |
| DALBHARAT | 1,142,000 | 1,585.05 | 2.55% | -19.70% |
| HINDUNILVR | 10,411,200 | 2,639 | 1.17% | -17.21% |
| GODREJPROP | 3,265,275 | 1,451.80 | 0.56% | -15.01% |
| ADANIENT | 20,571,500 | 2,500.65 | 0.21% | -14.96% |
(Increase in price and decrease in open interest)
Short build-up
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| SYNGENE | 1,158,000 | 571.45 | -4.84% | 14.77% |
| LUPIN | 5,023,500 | 637.7 | -2.06% | 4.59% |
| MGL | 3,275,200 | 749.55 | -3.07% | 1.88% |
| DEEPAKNTR | 1,728,500 | 1,804 | -3.07% | 0.91% |
| OBEROIRLTY | 4,414,200 | 895.8 | -0.25% | 0.84% |
(Decrease in price and increase in open interest)
52-week highs
A total of 10 stocks on the BSE 500 — the broadest index on the bourse —touched the milestone: ITC, Bajaj Auto, TVS Motor, Eicher, Adani Enterprises, BEL, Blue Dart, Coromandel, M&M Financial and Great Eastern Shipping.
52-week lows
No stock in the 500-scrip basket hit a 52-week low.
First Published:Jul 24, 2022 4:10 PM IST
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