Indian equity benchmarks extended losses to the sixth session in a row on Friday, dragged by financial and metal stocks though FMCG, oil & gas and auto shares limited the downside.
NSE
The Nifty50 is almost 1,500 points below its long-term simple moving average thanks to the sustained sell-off.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a long body negative candle on the daily chart with a long upper shadow, reflecting a lack of strength in the market to sustain the highs, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. He sees a 'sell on rise' opportunity in the market.
All eyes on the recent low
A slide below the recent low of 15,671 will create a panic situation in the market, Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One, told CNBCTV18.com. Below that level, 15,350-15,200 will be the next levels to watch out for and on the flipside, a stiff hurdle is expected in the 16,000-16,200 band, he said.
He sees the first sign of relief beyond these levels, and suggests avoiding aggressive trades at the current juncture.
ALSO READ: Key factors to impact the market this week
Here are key things to know about the market before the May 16 session:
SGX Nifty
At 7:40 am on Monday, Singapore Exchange Nifty futures -- an early indicator of the Nifty index -- were up 85.5 points or 0.5 percent at 15,858, suggesting a higher opening ahead on Dalal Street.
Global markets
Equities in other Asian markets were largely up on Monday though caution persisted following weak readings from China that underlined the damage lockdowns were doing to the world's second largest economy. MSCI's broadest index of Asia Pacific shares outside Japan was up 0.3 percent in early hours.
China's retail sales dropped 11.1 percent in April, and factory output fell 2.9 percent in contrast to expectations of expansion.
Japan's Nikkei 225 was up 0.2 percent, Hong Kong's Hang Seng 0.1 percent and Singapore's Straits Times 0.8 percent. China's Shanghai Composite and South Korea's KOSPI were down 0.3 percent each.
S&P 500 futures were down 0.7 percent. On Friday, the main Wall Street indices jumped as relief at signs of peaking inflation vied with fears that policy tightening by the Fed could tilt the world's largest economy into recession. The S&P 500 rose 2.4 percent, the Dow Jones 1.5 percent and the Nasdaq Composite 3.8 percent.
What to expect on Dalal Street
HDFC Securities' Shetti expects high volatility to persist in the market and believes the Nifty's short-term trend remains negative.
"The presence of crucial support going by the monthly timeframe and the overall weekly chart suggests the chances of an important bottom reversal around 15,500-15,400 levels. Only the confirmation of a reversal pattern on the daily chart could open a sustainable upside bounce," he said.
Important levels to watch out for
The Nifty50 remains far away from its six-main moving averages in a bearish sign.
Period (No. of sessions) | Simple moving average |
| 5 | 16,059.8 |
| 10 | 16,424.2 |
| 20 | 16,799.5 |
| 50 | 16,981.2 |
| 100 | 17,196.9 |
| 200 | 17,251.1 |
Mohit Nigam, Head-PMS at Hem Securities, pointed out the following levels:
| Index | Support | Resistance |
| Nifty50 | 15,600 | 16,000 |
| Nifty Bank | 33,000 | 34,000 |
FII/DII activity
Call/put open interest
The maximum call open interest is accumulated at the strike price of 17,000, with 1.3 lakh contracts, and 16,800, with more than 91,000 contracts, according to exchange data. On the flipside, the maximum put open interest is at 15,000, with almost 63,000 contracts, and the next highest at 15,500, with more than 46,000 contracts.
This shows a major hurdle awaits the Nifty50 more than 1,000 points away at 16,800, and immediate support comes in at 15,500.
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 (%) |
| ABFRL | 97,91,600 | 264.2 | 4.82% | 8.79% |
| M&M | 1,05,35,000 | 892.1 | 3.10% | 7.16% |
| SUNPHARMA | 1,83,18,300 | 882.1 | 3.58% | 6.10% |
| RBLBANK | 4,49,58,700 | 111 | 8.72% | 5.79% |
| GODREJCP | 55,51,500 | 801.8 | 3.94% | 3.13% |
Long unwinding
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| INTELLECT | 14,73,750 | 569.65 | -1.55% | -12.52% |
| OFSS | 3,04,125 | 3,224.05 | -8.07% | -7.85% |
| CHAMBLFERT | 19,71,000 | 392.1 | -4.82% | -7.15% |
| ABBOTINDIA | 29,250 | 16,452.50 | -1.92% | -6.32% |
| PVR | 25,38,459 | 1,750.85 | -0.16% | -4.73% |
(Decrease in open interest as well as price)
Short covering
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| IGL | 1,53,20,250 | 372.3 | 7.40% | -19.79% |
| APOLLOTYRE | 1,22,85,000 | 199.7 | 2.10% | -8.83% |
| COFORGE | 7,09,400 | 3,711.80 | 2.05% | -7.94% |
| SIEMENS | 15,49,625 | 2,292 | 0.42% | -7.51% |
| CANFINHOME | 39,71,175 | 493.35 | 4.66% | -6.90% |
(Increase in price and decrease in open interest)
Short build-up
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| NTPC | 7,85,97,300 | 144.45 | -2.73% | 14.43% |
| BANKBARODA | 11,91,23,550 | 93.75 | -2.39% | 2.91% |
(Decrease in price and increase in open interest)
52-week lows
A total of 31 stocks on the BSE 500 — the broadest index on the bourse — hit 52-week lows.
| AAVAS | HINDZINC | OFSS |
| AUROPHARMA | HONAUT | RAMCOCEM |
| AXISBANK | INDOSTAR | RECLTD |
| CAMS | INDUSTOWER | SAIL |
| CSBBANK | INTELLECT | SBICARD |
| DIXON | ITI | SEQUENT |
| EMAMILTD | MANAPPURAM | SUDARSCHEM |
| GILLETTE | MCX | SUNTV |
| GSPL | MOIL | VOLTAS |
| HDFCAMC | NAM-INDIA | |
| HDFCBANK | NAUKRI |
52-week high
No stock on the 500-scrip index managed to touch the milestone.
Fear gauge
The India VIX — known in market parlance as the fear index — cooled off 3.2 percent to settle at 23.5 on Friday, easing from a seven-week closing high.
First Published:May 15, 2022 8:59 PM IST
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