Indian equity benchmarks surged nearly two percent on Wednesday amid a rally across global shares, ahead of the Fed's announcement of its first hike in interest rates in more than three years as widely expected. Globally, updates on the Russia-Ukraine war and rising COVID cases in China that triggered curbs in a major industrial belt remained on investors' radar.

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The India VIX, also known as the fear index, dropped 9.8 percent to 24.1 -- its biggest single-day fall in a month.

The Nifty50 is now within 13 points of its 200-day moving average.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a reasonable long bull candle on the daily chart, signalling chances of a decisive breakout above 17,000 levels in the coming session, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

"If the 50-scrip benchmark surpassed the 16,800-17,000 resistance area, one may expect sharp upmoves in the near term. In such a case, the Nifty could reach up to 17,500 levels quickly," he said.

Nifty headed all the way to 17,200?

The 50-scrip index has maintained a higher-high-and-higher-low formation and is heading towards 17,000 and 17,200 levels, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

"The current texture is likely to continue unless the Nifty slips below 16,750-16,700 levels, above which it could rise up to 17,100-17,200 levels. Traders may prefer to take a caution stance if it slips below 16,750, which will increase the chances of it hitting the 16,700-16,600 band," he said.

Here are key things to know about the market before the March 17 session:

SGX Nifty

At 7:39 am on Thursday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were up 258.5 points or 1.5 percent at 17,265.5, suggesting a gap-up opening ahead on Dalal Street.

Global markets

Equities in other Asian markets surged tracking overnight gains on Wall Street, after the Fed approved a 0.25 percentage point rate hike in pandemic-era interest rates and officials signalled six more increases at the remaining meetings this year.

MSCI's broadest index of Asia Pacific shares outside Japan was up 2.5 percent in early hours. Japan's Nikkei 225 surged three percent and Hong Kong's Hang Seng four percent. China's Shanghai Composite was up 1.2 percent, South Korea's KOSPI 1.9 percent and Singapore's Straits Times 1.1 percent.

S&P 500 futures were down 0.1 percent. On Wednesday, the S&P 500 closed 2.2 percent higher, the Dow Jones rose 1.6 percent and the Nasdaq Composite 3.8 percent.

What to expect on Dalal Street

HDFC Securities' Shetti believes the stage is set for the Nifty50 to give a smart upside breakout of 17,000-17,050 levels in the short term.

"A sustainable move above this area is expected to result in decisive follow-through upmoves in the market. Any failure could result in minor weakness or consolidation at the highs. Immediate support is placed at 16,830," he said.

Rahul Sharma, co-founder of Equity99 Advisory, expects a volatile session on Thursday given the outcome of the FOMC meeting and the weekly expiry of F&O derivatives by the end of the day. One should also keep in mind the ongoing FII selling before taking any positions.

Levels to watch out for

Sharma pointed out the following levels:

FII/DII activity

In contrast to the trend of FII outflows prevalent for much of the past six months, foreign institutional investors (FIIs) net purchased Indian equities worth Rs 312 crore on Wednesday, according to provisional exchange data. Net purchases by domestic institutional investors (DIIs), which have been buyers, stood at Rs 772.6 crore.

Call/put open interest

Exchange data shows the maximum call open interest is accumulated at 17,500, with 1.7 lakh contracts, and next at 18,000, with 1.2 lakh contracts. The maximum put open interest at 16,000, with 1.8 lakh contracts, and 16,500, with almost 85,200 contracts.

This suggests the major hurdle has shifted by 500 points to 17,500, and immediate support at 16,500 followed by a strong cushion 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: JK Paper, Linde, Bharat Dynamics, Cholamandalam Investment and Rhi Magnesita.

52-week lows

One stock on the index hit a 52-week low: Thyrocare.

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(Edited by : Abhishek Jha)

First Published:Mar 16, 2022 6:17 PM IST