As Nifty50 Halts Pullback, More Pain On The Cards For The Bulls

Indian stock benchmarks ended a two-day slump on Wednesday amid weakness in all sectors, while global markets continued to be nervous about steep rises in COVID-era interest rates and their impact on economic growth.

What do the charts now suggest for Dalal Street?

The Nifty50 has formed a moderately negative candle on the daily chart, indicating the possibility of a bull trap in the market, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

He believes the 50-scrip index is in for even more pain as the market lacks the strength to hold its upward point.

Lateral movement can continue

More action in the market can be expected in the near future, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

“Traders can expect immediate resistance at 15,500, above which the rally can continue to 15,600-15,650 levels. On the downside, the main support to watch for is 15,350, below which the index could fall to 15,250-15,200,” he said.

Here are key things to know about the market ahead of the June 23 session:

SGX Nifty

Singapore Exchange (SGX) Nifty futures – an early indicator of the Nifty index – rose as much as 100 points or 0.6 percent to 15,497 on Thursday, suggesting a higher open on Dalal Street.

Global Markets

Stocks in other Asian markets were a mixed bag of positive bias, although investor caution continued after Fed Chair Jerome Powell said the US central bank remains “strongly committed” to fighting inflation. MSCI’s broadest index of Asia-Pacific stocks outside of Japan was flat at last count.

Japan’s Nikkei 225 fell 0.1 percent, South Korea’s KOSPI 0.5 percent and China’s Shanghai Composite remained flat. Hong Kong’s Hang Seng and Singapore’s Straits Times each rose 0.6 percent.

S&P 500 futures fell 0.5 percent. On Wednesday, Wall Street’s three major indices rose 0.1-0.2 percent lower at the end of a choppy session.

What to Expect in Dalal Street

HDFC Securities’ Shetti believes the immediate reversal of the recent rise is a bad sign for the bulls.

“You can expect the Nifty to slide into the key support area of ​​15,200 levels in the next few sessions, with immediate resistance at 15,560,” he said.

Important levels to track

The Nifty50 is 10.5 percent below its simple long-term moving average in a bearish signal.

Period (number of sessions)

Simple Moving Average
5 15,411.3
10 15.693.5
20 16,089
50 16,435.2
100 16,789
200 17,215.8

Mohit Nigam, Head-PMS at Hem Securities, pointed out the key resistance and support levels:

Index support Resistance
Nifty50 15,200 15,600
Handy sofa 32,400 33,300

FII/DII activity

Call / open interest

The maximum open call rate is accumulating at the strike price of 15,700, with two lakh contracts, and the next highest at 16,000, with 1.9 lakh contracts, according to exchange data. The maximum outstanding interest is 15,000, with 1.6 lakh contracts, and the next highest at 15,200, with 1.1 lakh.

This suggests strong resistance at 15,700 followed by a major hurdle at 16,000 and immediate support at 15,200.

Here are five stocks that saw both open interest and price rise:

stock Current OI CMP Price change change OI
PVR 1,992.672 1,795.85 0.52% 10.29%
POLYCAB 629.100 2,130.25 0.33% 9.97%
STRANSFIN 3,295,600 1,161.60 0.75% 6.97%
MPHASIS 1,811,075 2,290.95 0.34% 6.80%
TCS 9,886,500 3.224.10 0.25% 6.78%

Long unwind

stock Current OI CMP Price change change OI
FEDERALBNK 59,830,000 86.85 -1.36% -3.34%
AUBANK 6,677,000 597.8 -2.13% -2.64%
CANFIN HOME 3.316.950 418.85 -0.91% -2.53%
ZYDUSLIFE 9,831,800 343.25 -0.98% -2.42%
INDHOTEL 18,243,792 214.8 -3.37% -2.31%

(Decrease in open interest and price)

Short Coverage

stock Current OI CMP Price change change OI
RAMCOCEM 3.289.500 600 0.05% -2.84%
RBLBANK 40,640,600 87.15 3.38% -2.61%
MOUNTAIN PAINT 4,819,100 587.05 0.20% -0.89%
TATACOMM 3,198,000 895 0.88% -0.26%

(Increase in price and decrease in open interest)

stock Current OI CMP Price change change OI
HINDKOPER 10,913,400 83.15 -8.53% 20.76%
suntv 11,523,000 408.75 -8.85% 14.48%
DRREDDY 1,617,375 4.237.45 -0.60% 13.40%
UBL 1,057,350 1,474.05 -0.92% 12.41%
DELTACORP 12,951,300 173.35 -3.40% 9.00%

(Decrease in price and increase in open interest)

Highlights of 52 weeks

No stock in the BSE 500 universe – the broadest index on the exchange – reached the milestone.

52 week lows

A total of 26 stocks in the 500-strong index hit a 52-week low. Among them were three Sensex stocks: Tata Steel, Axis Bank and IndusInd.

First print: IST

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