Indian equity benchmark recovered most of their previous day's losses on Tuesday helped by sharp gains in IT and metal stocks. Heavyweights such as ITC and Bajaj Finance were in high demand, also boosting investors' morale. The Nifty50 gauge reclaimed the 17,550 mark.

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NSE

The banking index bounced back from the day's lows to rise a modest 0.2 percent.

So, what do the charts suggest for Dalal Street?

The index formed a bullish candle on the daily chart following two bearish candles, said Rohit Singre, Senior Technical Analyst at LKP Securities.

Nifty50 is now expected to find support at 17,500-17,430 levels, and one can lock long gains around the resistance zone of 17,600-17,660, he said.

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"Technically, the texture of the sharp reversal formation near the 10-day simple moving average suggests a further uptrend from the current level. While the short-term trend still looks up, uncertain global market conditions could see the Nifty within the range of 17,450-17,650 levels," said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

Here are key things to know about the market before Wednesday's session:

SGX Nifty

At 8:10 am on Wednesday, Nifty futures trading on Singapore Exchange -- an early indicator of India's Nifty50 benchmark index -- were down 34.5 points or 0.2 percent at 17,527, suggesting a muted start ahead on Dalal Street.

Global markets

Equities in other Asian markets made a cautious start on Wednesday as investors awaited the outcome of the Federal Reserve's decision on rates and tapering of stimulus. Worries about the fallout from a looming failure at Chinese developer Evergrande kept investors on the back foot. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.4 percent in early hours, while Japan's Nikkei 225 index was down 0.6 percent.

Overnight on Wall Street, two of the three key indices declined 0.1-0.2 percent and the tech stocks heavy Nasdaq Composite gauge rose 0.2 percent. S&P 500 E-Mini futures were nearly unchanged in early Asian trade, hinting at a flat start on Wall Street on Wednesday.

What to expect on Dalal Street

For day traders, as long as the index is trading above the 17,450 mark, a pullback rally is likely to continue up to 17,600-17,650-17,680 levels, said Chouhan. "Below 17,430, the uptrend would be vulnerable," he warned.

Key levels to watch out for

Nifty50: Rahul Sharma, Co-Founder of Equity99, said immediate support for the index is still at 17,500, and the next big support at 17,325. Major resistance is seen at 17,700 followed by 17,800, he said.

Bank Nifty: Support for the banking index is placed at 37,050, a strong break of which can take it to 36,750-36,600 levels, and resistance at 37,350, and the next at 37,600-36,700 levels.

ALSO READ: Can you bank on Bank Nifty now?

FII/DII activity

Foreign institutional investors (FIIs) brought in a net Rs 92.5 crore into the Indian capital market on Monday. However, net sales by domestic institutional investors (DIIs) were as high as Rs 1,626.6 crore, exchange data showed.

ALSO READ: FIIs remain bullish on India, net purchase Rs 13,083-crore Indian shares so far in Sept

Call/put open interest

The maximum call open interest is accumulated at the strike price of 18,000, and the second highest at 17,800. On the other hand, the maximum put open interest is concentrated at the 17,400 mark, followed by 17,300, NSE data shows. This suggests that immediate resistance can be expected at 17,800, followed by 18,000, and support comes in at 17,400.

Long build-up

Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:

Long unwinding

(Decrease in open interest and price)

Short-covering

(Decrease in open interest and increase in price)

Short build-up

(Increase in open interest and decrease in price)

Stocks hitting 52-week highs

ITC, Bajaj Finance, Bajaj Finserv, HCL Tech, HUL, ONGC, Tata Elxsi, Mindtree and IndiGo were among the 19 stocks in the BSE 500 index — the broadest gauge on the stock exchange — that clocked 52-week highs. Pidilite, JSW Energy, Allcargo, Coforge, GMR Infra and Zydus Wellness also hit the milestone.

52-week lows

No stock in the BSE 500 universe hit a 52-week low. Apart from that, CarTrade Tech, Rolex Rings, Krsnaa Diagnostics, Aptus Value, Muthoot Capital and Suvidhaa Infoserve were among the 24 stocks that hit the trough on the bourse.

Volatility gauge

NSE's India VIX index -- which gauges the expectation of volatility in the market -- eased 5.6 percent to 16.52, a day after surging to a three-month high.

First Published:Sept 21, 2021 7:50 PM IST