The Nifty 50 continues to face pressure at 18,400. Same was the case on Tuesday. It has crossed the 18,400 mark intraday for the last two days, but failed to hold on.

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On Tuesday, the index not only failed to surpass both Monday's high, its intraday low was also below Monday's low of 18,287. The Nifty 50 closed below 18,300 for the first time since May 9.

The Nifty Bank too came within seven points of its record high, but reversed soon after. The index is now 250 points away from the level of 44,151.

What Are The Charts Indicating?

Nagaraj Shetti, HDFC Securities

Observation: Long bear candle formed on daily chart of Nifty 50, indicating the formation of a non-classical bearish engulfing pattern.

Conclusion: Chances of sizeable downward correction likely in the near-term.

Rohan Patil, SAMCO Securities

Observation: Nifty 50 Momentum oscillator reached overbought territory of 75 and reversed.

Conclusion: Extended profit booking at current levels cannot be ruled out.

Rajesh Bhosale, Angel One

Observation: Prices ended just around breakdown levels on the hourly chart.

Conclusion: View any short-term correction as a healthy part of an upward trend. First hour on Wednesday crucial.

Rupak De, LKP Securities On Nifty 50

Observation: Bearish engulfing pattern, RSI entering bearish crossover suggesting a shift towards bearish sentiment.

Conclusion: Decisive drop below support levels can trigger further selling pressure.

Kunal Shah, LKP Securities On Nifty Bank

Observation: Negative divergence on the RSI confirming bearishness.

Observation 2: High Open Interest built-up on 43,500 Put strike

What Are The Global Cues Indicating?

Asian equities have opened mixed as the region looks to economic data from countries like Japan.

The Nikkei is up 0.4 percent in early trading, while the Topix is up 0.1 percent, maintaining the levels highest since August 1990.

The Kospi is flat, while the Kosdaq is up 0.5 percent. Australian indices are down close to a percent. Hong Kong Futures are pointing to a weak start.

Wall Street had a weak session overnight ahead of the crucial debt ceiling talks. The Dow Jones fell 1 percent, while the S&P 500 and Nasdaq fell 0.6 percent and 0.2 percent respectively.

The Singapore (SGX) Nifty futures, which provide an indication as to how Indian equities will begin trade, fell 23.5 points or 0.13 percent to 18,306, pointing to a subdued start to today's trading session.

F&O Cues (May 18 Expiry)

Open Interest addition seen in the 18,400 strike call (82 lakh shares)

Open Interest addition also seen in 18,350 (50 lakh shares), 18,300 (44.6 lakh shares) and 18,500 Call (46.1 lakh shares)

Open Interest shedding seen in 18,350 Put (13.4 lakh shares) and 18,300 Put (8.3 lakh shares)

Nifty 50 Put-Call Ratio down to 0.89 from 1.34 on Monday

Manappuram Finance is back in the F&O Ban while BHEL is out. PNB, GNFC, Delta Corp remain in the ban period.

Foreign investors continued to remain net buyers in the cash market on Tuesday, while Domestic Investors were net sellers for the second day in a row.

Let us take a look at what F&O data is suggesting for specific stocks:

Fresh Longs - Increase In Price and Open Interest

Fresh Shorts - Decrease In Price and Increase In Open Interest

First Published:May 16, 2023 10:44 PM IST