Indian equity benchmarks surged on Tuesday amid gains across sectors — a second straight day of higher closing following a sell-off that stretched to six days in a row and took away more than five percent of their value. What do the charts suggest for Dalal Street now?

Share Market Live

NSE

The Nifty50 has formed a long bullish candle on the daily chart in a broadly positive signal for the short term, according to Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

He sees 16,150 as the trend deciding level for traders, above which, the positive momentum is likely to continue till 16,380-16,450-odd levels in his view. However, in case the index slides below that level, some quick intraday correction will be on the cards making it retest 16,080-16,050 levels, he warns.

A trend reversal, finally

The 50-scrip index has not only broken out of an indecisive phase but also crossed key hourly moving averages, reinforcing the bulls, said Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas.

Its short-term trend has turned positive, he said.

Here are key things to know about the market before the May 18 session:

SGX Nifty

On Wednesday, Singapore Exchange Nifty futures — an early indicator of the Nifty index — declined as much as 73 points or 0.4 percent to 16,196 ahead of the opening on Dalal Street.

Global markets

Equities in other Asian markets were a mixed bag, despite a strong session on Wall Street overnight boosted by solid retail sales, and optimism on easing crackdown on tech firms and COVID in China. MSCI's broadest index of Asia Pacific shares outside Japan was flat in early hours.

Japan's Nikkei 225 was up 0.7 percent, South Korea's KOSPI 0.2 percent and Singapore's Straits Times 0.6 percent. China's Shanghai Composite was down 0.5 percent and Hong Kong's Hang Seng down one percent.

S&P 500 futures edged 0.1 percent lower. On Tuesday, the S&P 500 jumped two percent, the Dow Jones 1.3 percent and the tech stocks-heavy Nasdaq Composite 2.8 percent.

What to expect on Dalal Street

Ratnaparkhi sees immediate resistance for the index in the 16,480-16,500 zone and support at 16,100-16,000 from a short-term perspective.

The recent spike in the index can only by considered a pullback as it is yet to confirm a change in trend, according to Ruchit Jain, Lead Research at 5paisa.com. The index has to form a higher top-higher bottom structure for the confirmation, he said.

Important levels to watch out for

The Nifty50 crossed its five- and 10-day moving averages, and the banking index only the five-day level after more than a week.

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 16,500, with 1.1 lakh, according to exchange data. On the other hand, the maximum put open interest is at 16,000, with 1.2 lakh contracts, and the next highest at 15,500, with 1.1 lakh.

This shows immediate resistance at 16,500 followed by the major hurdle of 17,000, whereas immediate support has now risen by 200 points to the 16,000 mark.

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 nine stocks on the index hit 52-week lows: Aurobindo Pharma, HDFC AMC, Solara Active Pharma, Honeywell Automation, Nilkamal, Orient Electric, Galaxy Surfactants, EPL and Amber Enterprises.

Fear gauge

The India VIX — known in market parlance as the fear index — plunged 7.3 percent to settle at 22.7 on Tuesday, its biggest fall in three weeks.

First Published:May 17, 2022 9:35 PM IST