Indian equity benchmarks eked out mild gains on Monday to halt a losing streak that lasted for six back-to-back sessions and took away more than five percent of their value. Gains in financial and auto stocks aided the rebound in the Nifty50, though losses in IT shares limited the upside.

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What do the charts suggest for Dalal Street now?

The Nifty50 has formed a doji pattern on the daily chart, reflecting indecision in the minds of market participants, according to Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas.

He expects the index to stay under pressure and test the March low of 15,671 as long as it trades below 16,000. "If the bulls do manage to take out 16,000 on a closing basis, the Nifty can take a leap towards 16,200-16,250 levels," he said.

Nifty not out of the woods

The 50-scrip index's texture suggests a strong possibility of more rangebound activity in the near future, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

"Benchmark indices were going great guns, but profit taking saw the market pare most of their early gains... There are concerns that raising interest rates to quell higher inflation could hurt growth and may result in further correction," he warned.

Also Read: Key factors to impact the market this week

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

SGX Nifty

Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty50 index -- rose as much as 54 points or 0.3 percent to 15,897.5 early on Tuesday, suggesting a higher opening ahead on Dalal Street.

Global markets

Equities in other Asian markets began Tuesday stronger following a mixed session on Wall Street overnight. MSCI's broadest index of Asia Pacific shares outside Japan was up 1.2 percent in early hours.

Japan's Nikkei 225 was up 0.3 percent, China's Shanghai Composite 0.1 percent, Hong Kong's Hang Seng 1.8 percent, South Korea's KOSPI 0.8 percent and Singapore's Straits Times 0.5 percent.

S&P 500 futures were down 0.4 percent. On Monday, the S&P 500 finished 0.4 percent lower as Tesla and other growth stocks lost ground after downbeat Chinese economic data added to worries about a global slowdown and rising interest rates. The Dow Jones edged up 0.1 percent but the technology stocks-heavy Nasdaq Composite fell 1.2 percent.

What to expect on Dalal Street

Kotak Securities' Chouhan expects immediate resistance for the bulls at 15,950, above which, a sharp intraday pullback rally is possible till 16,000-16,100 in his view.

"On the other hand, 15,750 could be the immediate support level, below which, the chances of the index hitting the 15,700-15,600 zone would increase.”

Important levels to watch out for

The Nifty50 as well as the banking index are almost nine percent below their long-term simple moving averages in a bearish sign.

Mohit Nigam, Head-PMS at Hem Securities, pointed out the following levels:

FII/DII activity

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 16,500, with 1.1 lakh contracts, according to exchange data. On the flipside, the maximum put open interest is at 15,000, with almost 84,000 contracts, and 15,800, with almost 66,000.

This shows a major hurdle awaits the Nifty50 at 16,500 and immediate support comes in at 15,800.

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

(Decrease in price and increase in open interest)

52-week high

No stock on the BSE 500 — the broadest index on the bourse — hit a 52-week high.

52-week lows

A total of 29 stocks on the index hit 52-week lows.

Fear gauge

The India VIX — known in market parlance as the fear index — jumped

4.4 percent to settle at 24.5 on Monday, its highest since March 23.

First Published:May 16, 2022 7:50 PM IST