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More weakness ahead for Nifty50?  Check out the main market indices ahead of Monday’s session

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More weakness ahead for Nifty50? Check out the main market indices ahead of Monday’s session

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Benchmark Indian stocks ended a volatile session lower on Friday, extending losses to a fourth consecutive day. Weakness in most sectors, with IT, financials and metals being the hardest hit, dragged major indexes lower.

Nifty Bank continued to fall for the seventh day in a row, down 3% over the period.

What do the charts suggest for Dalal Street now?

The Nifty50 formed a small candle on the daily chart with upper and lower shadows, indicating increased market volatility at the lows, according to Nagaraj Shetti, technical research analyst at HDFC Securities.

“Normally, such a doji formation after a reasonable movement in either direction is seen as an impending signal of a trend reversal. term,” Shetti said. , which remains of the view that the Nifty’s short-term trend is weak with high volatility.


Nifty sinks below key levels

“Although we see 18,350 as a slight hurdle, we did not expect the Nifty to break out with such speed. After the index broke above 18,100, we had anticipated a further drop towards 17,800, but whatever happened in the last two sessions, with it even testing 17,500, surprised us negatively to some extent,” said Sameet Chavan, Chief Technical and Derivatives Analyst at Angel One.

“We mentioned how important 17,650 is in the short term and that the real damage from the recent uptrend would start below. On Friday we slipped below, but the way the market rallied during of the last hour, so we have to revise our levels a bit,” he said.

Here are the key things to know about the market ahead of the January 24 session:

Global Markets

Major Wall Street indexes fell on Friday as Netflix earnings disappointed investors. The S&P 500 closed down 1.9%, the Dow Jones fell 1.3% and the tech-heavy Nasdaq Composite fell 2.7%. The S&P 500 and Nasdaq posted their biggest weekly percentage declines since March 2020.

Earlier in the day, European stocks fell, with the Stoxx 600 index down 1.8%.

What to expect in Dalal Street

Angel One’s Chavan sees crucial support for the Nifty50 in the 17,500-17,400 area this week. “Although the overall situation is not good, we would still like to support our inclination towards relief measures. If a recovery were to occur, there would be no better levels than this,” he said.

He thinks the first sign of strength will likely start above 17,800, after which the index may recover the ground from 18,000 before the budget itself. “The first two sessions will be important for the market as they will set the tone ahead of the mega event (Budget)… Focus should be on the financial and automotive spaces, which are likely to be first in the event of a recovery” , he added.

Market participants will start the trading week by reacting to quarterly figures from index heavyweights Reliance Industries and ICICI Bank.

Ajit Mishra, VP of Research at Religare Broking, believes the Nifty should hold 17,600 for any meaningful rally or it could slip to 17,350. He suggests taking hedged positions until the market stabilizes.

Main levels to monitor

Nifty50: Strong support for the 50-scrip index is expected at 17,200 and key resistance at 18,300, according to Mohit Nigam, Head-PMS at Hem Securities.

Clever bank: For the banking index, he sees key support at 37,100 and resistance at 38,500.

Provisional trading data shows Foreign Institutional Investors (FIIs) sold Indian shares worth Rs 3,148.6 crore on Friday. However, domestic institutional investors made net purchases of Rs 269.4 crore.

Exchange data shows that the maximum open interest on call is accrued at the strike price of 18,000, with 1.8 lakh contracts, and the next highest at 18,500, with 1.3 lakh contracts. lakh. On the other hand, the maximum sell open interest is placed at 17,000, with 1.1 lakh contracts.

This suggests a major hurdle at 18,000 and significant support only at 17,000.

Here are two stocks that have seen an increase in open interest as well as price, suggesting an accumulation of long positions:

symbol Current IO CPM Price change (%) Change in OI (%)
Biocon 37,32,900 378 3.29% 73.58%
Chola Finance 25,22,500 653 0.43% 163.10%

Long relaxation

symbol Current IO CPM Price change (%) Change in OI (%)
Infosys 24340200 1783.2 -2.27% -4.75%
Tata Steel 31916225 1168.35 -3.54% -18.57%
ICICI Bank 56821875 807.05 -0.74% -10.30%
Bharti Airtel 40975400 695.6 -2.95% -23.08%
ICC 138937600 217.65 -0.89% -24.28%

(Decrease in open interest as well as price)

Short cover

symbol Current IO CPM Price change (%) Change in OI (%)
Hindalco 27602775 361.8 192.21% -9.29%
HDFC Bank 23825450 3,467.85 38.60% -19.36%
HUL 6883500 260.65 84.71% -18.68%
HDFC 11665800 573.6 70.12% -8.55%
Maruti 2227200 152.2 69.27% -3.19%

(Increase in price and decrease in open interest)

Short setup

symbol Current IO CPM Price change (%) Change in OI (%)
Volta 3019000 1187.65 -5.08% 0.37%
Dr Lal 551125 3001.9 -6.05% 4.11%
Power of torrents 2572500 551.8 -3.97% 1.24%
Infra GMR 73485000 42.35 -2.64% 0.43%

(Increase in open interest and decrease in price)

52 Week Highs

As many as 15 stocks in the BSE 500 pack hit 52-week highs, including Power Grid, Sun Pharma Advanced, Tata Elxsi, Adani Green, Adani Transmission, Greaves Cotton and Lakshmi Machine.

52 week lows

Ten stocks hit 52-week lows: SBI Cards, IGL, Cadila Healthcare, Zydus Wellness, IndiaMART, Sanofi, Spandana Sphoorty, Jubilant Pharmova, Strides Pharma and MAS Financial.

Volatility indicator

India’s NSE VIX index – which measures volatility expectations in the market – climbed 6.2% on Friday to 18.9, its biggest jump since January 5.

More weakness ahead for Nifty50? Check out the main market indices ahead of Monday’s session

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