India Finance News

Trade setup for June 20: Nifty50 may be gearing up for a pullback – CNBCTV18

Indian equity benchmarks ended a choppy session mildly lower on Friday, extending losses to the sixth session in a row, dragged by weakness in IT shares though strength in financial stocks limited the downside.

Global markets showed signs of a pullback but concerns about aggressive hikes in COVID-era interest rates and their impact on economic growth kept investors on the back foot.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a small-bodied positive candle on the daily chart with upper and lower shadows, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

He sees the possibility of a minor pullback from the current level or from the lows.

A key level to watch out for in Nifty Bank

The Nifty Bank appears to be in the oversold territory after the fight between the bulls and the bears on Friday, said Kunal Shah, Senior Technical and Derivatives Analyst at LKP Securities.

“If the banking index holds support at 32,500, it can witness a pullback rally towards 33,500. If it is breached, it may suffer a fresh round of selling towards 30,000,” he said.

Here are key things to know about the market ahead of the June 20 session:

SGX Nifty

Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — fell as much as 48.5 points or 0.3 percent to 15,267 early on Monday, suggesting a lower opening ahead on Dalal Street.

Global markets

Equities in other Asian markets slipped on Monday as US futures gave up early gains amid worries the Fed would this week underline its commitment to fighting inflation with aggressive rate hikes if needed. MSCI’s broadest index of Asia Pacific shares outside Japan were down 0.9 percent at the last count.

Japan’s Nikkei 225 was down 1.3 percent, China’s Shanghai Composite 0.6 percent and Hong Kong’s Hang Seng 0.8 percent.

S&P 500 futures edged 0.1 percent lower ahead of a holiday on Monday. On Friday, the three main Wall Street indices were a mixed bag with the S&P 500 rising 0.2 percent. The tech stocks-heavy Nasdaq Composite gained 1.4 percent but the Dow Jones declined 0.1 percent. 

What to expect on Dalal Street

HDFC Securities’ Shetti believes any bounce in the market can be utilised as an opportunity to sell in the short term.

“One can expect crucial resistance at 15,600 for the Nifty50, which is unlikely to be broken in a hurry,.. After a small bounce, the index could slide down to 15,000-14,800 levels in the near term,” he said.

Important levels to track

In a strong bearish sign, both Nifty50 and Nifty Bank are 11 percent below their long-term simple moving averages.

Period (No. of sessions) Simple moving average
Nifty50 Nifty Bank
5 15,570.6 33,083.3
10 15,987.5 34,023.8
20 16,187.2 34,582.4
50 16,571.8 35,234
100 16,845.4 35,975.2
200 17,239.5 36,761.2

Palak Kothari, Research Associates at Choice Broking, pointed out key resistance and support levels:

Index Support Resistance
Nifty50 15,000 15,500
Nifty Bank 32,300 33,800

FII/DII activity

Call/put open interest

The maximum call open interest is accumulated at the strike price of 16,000, with 1.3 lakh contracts, and the next highest at 16,300, with 1.2 lakh contracts, according to exchange data. The maximum put open interest is at 15,000, with nearly 82,000 contracts, and at 14,500, with 79,000 contracts.

This suggests strong resistance at the 16,000 mark followed by 16,300, and immediate support at 15,000.

Long build-up

Here are five stocks that saw an increase in open interest as well as price:

Stock Current OI CMP Price change (%) OI change (%)
HAL 1,539,475 1,840.20 2.49% 21.17%
RECLTD 24,840,000 112.95 1.03% 6.62%
SRTRANSFIN 3,081,200 1,143.10 1.48% 5.54%
CHOLAFIN 8,143,750 636.2 2.28% 3.22%
BHARATFORG 7,057,500 629.8 0.26% 2.92%

Long unwinding

Stock Current OI CMP Price change (%) OI change (%)
GUJGASLTD 5,355,000 414.5 -2.26% -20.19%
M&M 13,172,600 994.45 -1.12% -6.84%
DRREDDY 1,811,625 4,155.20 -3.07% -6.10%
IBULHSGFIN 27,503,200 96.85 -0.67% -5.80%
AARTIIND 3,585,300 689.2 -0.37% -4.84%

(Decrease in open interest as well as price)

Short covering

Stock Current OI CMP Price change (%) OI change (%)
CROMPTON 3,507,900 323.95 1.58% -8.94%
DELTACORP 14,310,600 184.8 12.96% -8.07%
GNFC 2,739,100 610.15 1.82% -7.74%
PNB 223,152,000 28.8 1.41% -7.33%
RBLBANK 46,597,200 82.7 0.30% -6.05%

(Increase in price and decrease in open interest)

Short build-up

Stock Current OI CMP Price change (%) OI change (%)
PETRONET 14,601,000 204.5 -4.53% 9.18%
WIPRO 28,981,600 407.55 -3.70% 8.58%
MPHASIS 1,638,350 2,195.20 -5.14% 8.13%
BSOFT 2,853,500 332.95 -2.92% 7.97%
TITAN 5,795,625 1,942.95 -5.66% 7.65%

(Decrease in price and increase in open interest)

52-week lows

A total of 128 stocks on the BSE 500 — the broadest index on the bourse — hit 52-week lows. As many as 13 Sensex stocks were among them: TCS, Infosys, Wipro, Tech Mahindra, HDFC Bank, HDFC, Tata Steel, Asian Paints, Asix Bank, Bajaj Finance, HCL Tech, IndusInd and UltraTech.

52-week high 

One stock on the 500-strong index managed to touch a 52-week high: Hindustan Aeronautics.

First Published:  IST

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