Indian shares halted a five-day winning streak on Tuesday, ending a percent lower in choppy trade, as investors took to profit booking in metal, IT, oil and gas, and select financial stocks.

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Sentiment remained cautious as the Street awaited the outcome of major central bank meetings this week amid a lack of progress on ceasefire talks between Russia and Ukraine, and rising COVID cases in China that prompted Beijing to impose curbs in a major industrial belt.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a long bear candle on the daily chart that almost engulfs the previous bull candle, suggesting the formation of a bearish dark cloud cover type pattern at the highs, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. One can expect more weakness in the coming session, he said.

All hunky-dory as long as Nifty holds 16,400-16,500

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, believes the short-term market is still on the bullish side technically. He suggests traders to adopt a level-based strategy in the coming days as volatility is expected to continue.

"As long as the 50-scrip index holds 16,500-16,400 levels, the uptrend is intact... The immediate hurdle will be at 16,900-16,950, and any fall below 16,400 may lead to further weakness up to 16,350-16,300," Chouhan said.

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

SGX Nifty

At 7:35 am on Wednesday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were up 231 points or 1.4 percent at 16,883.5, having risen as much as 290.5 points earlier in the day.

Global markets

Equities in other Asian markets began the day with strong gains tracking a rally on Wall Street overnight. MSCI's broadest index of Asia Pacific shares outside Japan was up 1.6 percent at the last count.

The Fed is widely expected to announce a hike in pandemic-era interest rates on Wednesday. Crude oil prices dropped seven percent on hopes of an end to the Ukraine crisis.

Japan's Nikkei 225 was up 1.7 percent, China's Shanghai Composite 0.5 percent and Hong Kong's Hang Seng 2.9 percent. South Korea's KOSPI was up 0.8 percent and Singapore's Straits Times 1.2 percent.

S&P 500 futures were down 0.1 percent. On Tuesday, the three main US indices surged 1.8-2.9 percent.

What to expect on Dalal Street

HDFC Securities' Shetti believes the Nifty's sharp U-turn from close to the crucial resistance zone of 16,800-17,000 hints at further correction in the market in the short term.

"The overall chart pattern signals the chances of a higher bottom formation around 16,400-16,250 in the next few sessions before another round of upmove," he said.

One can expect volatility to persist and traders should look for opportunities on both sides, said Ruchit Jain, Lead Research at 5paisa.com.

"Global events such as news flow on the Russia-Ukraine conflict and the outcome of the Fed meeting are likely to drive the near-term momentum. Technically, the index has cooled off from resistance levels and could enter into a broad consolidation phase before the next phase of a trend move," he added.

Levels to watch out for

Sachin Gupta, AVP-Research at Choice Broking, pointed out the following levels:

FII/DII activity

Foreign institutional investors (FIIs) net sold Indian equities worth Rs 1,249.7 crore on Tuesday, according to provisional exchange data. However, domestic institutional investors (DIIs) made net purchases worth Rs 98.3 crore.

Call/put open interest

Exchange data shows the maximum call open interest is accumulated at the strike prices of 17,500 and 17,000, with 1.7 lakh and 1.2 lakh contracts respectively. The maximum put open interest at 16,000, with more than 95,000 contracts.

This reflects the major hurdle of 17,000 for the Nifty, which has meaningful support only at 16,000.

Long build-up

Here are five stocks that saw an increase in open interest as well as price:

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

Four stocks in the BSE 500 universe hit 52-week highs: Cipla, JK Paper, Linde and Supreme Petrochem.

52-week lows

Two stocks on the index hit 52-week lows: Wockhardt and Thyrocare.

Volatility gauge

The India VIX — also known as the fear index — rose 4.1 percent to settle at 26.7 on Tuesday, having surged as much as 7.2 percent during the session. Late last month, Russia's move to invade Ukraine had sent the index soaring to almost 34, the highest in 20 months.

(Edited by : Ajay Vaishnav)

First Published:Mar 15, 2022 6:38 PM IST