Indian equity benchmarks began the second trading week of 2022 on a strong note led by broad-based gains, led by buying interest in financial, auto, metal and consumer stocks.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a long bull candle on the daily chart, with a lower degree of higher highs and higher lows, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The index has gained momentum after taking out the resistance level of 17,950, he said.
Near-term correction not ruled out
One should not rule out a correction in the near term, said Ruchit Jain, Lead Research at 5paisa.com. “We do not expect any significant price correction as the undertone in both the Nifty and the Bank Nifty remains bullish. Traders should look at proper money management and adding positions on declines rather than chasing the price upmove,” he said.
Jain is of the view that any dips towards immediate supports at 17,800 and 17,650 should be considered buying opportunities.
Here are key things to know about the market before the January 11 session:
SGX Nifty
At 7:45 am on Tuesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — were down 67 points or 0.4 percent at 17,980.5, suggesting a negative opening ahead on Dalal Street.
Global markets
Equities in other parts of Asia fell amid concerns about a tightening US monetary policy to address accelerating inflation. MSCI’s broadest index of Asia Pacific shares outside Japan was down 0.1 percent at the last count. Japan’s Nikkei 225 was down 1.1 percent, China’s Shanghai Composite 0.1 percent and Hong Kong’s Hang Seng 0.4 percent.
S&P 500 futures were flat in Asia. On Monday, the S&P 500 and the Dow Jones declined 0.1 percent and 0.5 percent respectively, though the Nasdaq Composite eked out a marginal gain.
What to expect on Dalal Street
HDFC Securities’ Shetti expects the Nifty50 to achieve levels of 18,200-18,350 in the next week, with immediate support at 17,870.
Some corrective declines can be expected as the Nifty approaches the resistance zone of 18,150-18,200, but long-term investors need not worry. That is the message from independent technical analyst Manish Shah.
“There could be some opportunities for players looking at reversion-to-mean trades. As of now, there are no signs of a corrective decline,” he said.
Shah believes the underlying trend in the market remains strong. “MACD and directional movement both are in a buy mode. RSI shows a trendline breakout and is still below overbought levels,” he said.
Key levels to watch out for
Nifty50: The 50-scrip index has support at 17,700 and resistance at 18,200, according to Sachin Gupta, AVP-Research at Choice Broking.
Bank Nifty: For the banking index, he sees support at 37,500 and resistance at 38,800.
FII/DII activity
Foreign institutional investors (FIIs) net sold Indian equities worth Rs 124.2 crore on Monday. However, domestic institutional investors saved the day once again, making net purchases of Rs 481.6 crore, according to provisional exchange data.
Call/put open interest
Exchange data shows the maximum call open interest is accumulated at the strike price of 18,500, with 85,000 contracts, and the next highest at 19,000, with almost 84,700 contracts. Also, the maximum put open interest is at 17,500, with some 90,750 contracts, and the next highest at 17,800, with more than 86,800 contracts.
This suggests a major hurdle each at 18,500 and Mount 19,000, and immediate support at 17,800, followed by a major cushion at 17,500.
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:
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| CHAMBLFERT | 27,79,500 | 434.95 | 2.24% | 22.29% |
| PVR | 26,30,441 | 1,432.20 | 4.73% | 18.74% |
| IDFC | 5,12,20,000 | 64.45 | 5.14% | 18.49% |
| INDIACEM | 1,42,01,300 | 252.6 | 4.86% | 16.44% |
| NBCC | 2,68,68,000 | 51.3 | 1.48% | 12.51% |
Long unwinding
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| PAGEIND | 85,110 | 43,775 | -0.85% | -1.94% |
| IDEA | 80,70,30,000 | 14.85 | -2.30% | -0.74% |
| PIDILITIND | 21,09,000 | 2,721.90 | -0.23% | -0.43% |
(Decrease in open interest as well as price)
Short-covering
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| GMRINFRA | 8,32,50,000 | 48.45 | 5.67% | -5.89% |
| DELTACORP | 1,99,50,200 | 281.85 | 1.33% | -3.99% |
| TATAPOWER | 11,42,77,500 | 232.9 | 1.02% | -3.00% |
| RBLBANK | 4,10,52,400 | 141.5 | 4.39% | -2.69% |
| TVSMOTOR | 76,02,000 | 646.85 | 1.36% | -2.56% |
(Increase in price and decrease in open interest)
Short build-up
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| IPCALAB | 11,00,925 | 1,062.80 | -3.52% | 120.56% |
| COFORGE | 7,62,700 | 5,464.95 | -4.32% | 22.26% |
| WIPRO | 2,65,80,000 | 693.8 | -2.59% | 18.40% |
| LTTS | 6,61,600 | 5,631.90 | -2.82% | 16.44% |
| RAIN | 36,00,000 | 241.9 | -1.55% | 12.64% |
(Increase in open interest and decrease in price)
52-week highs
In the BSE 500 pack, Asian Paints, Pidilite, Birlasoft, India Cements, KPIT Tech, SRF, Poonawalla Fincorp, Kajaria Ceramics and Sunteck Realty were among the 16 stocks that hit 52-week highs.
52-week lows
One stock in the broadest index on the bourse hit a 52-week low: MAS Financial Services.
Volatility gauge
NSE’s India VIX index — which gauges the expectation of volatility — ended with a gain of 0.4 percent at 17.7 on Monday, having jumped as much as 4.5 percent during the session.
