All sectors bled on the Street as investors across the globe braced for the outcome of the Fed’s scheduled policy review, due late on Wednesday.
What do the charts suggest for Dalal Street now?
The chart pattern also suggests a downside breakout of the index’s broader high-low range of around 17,400-16,900, which is “not a good sign and could spell more in the short term”, he said.
The RBI has created a stir in the market ahead of the result of the Fed meeting in the US. The benchmark index’s slide below the crucial level of 16,800 can be extended all the way to the 16,400-16,200 zone in the near term, warned Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
He sees the biggest hurdle at 16,800-16,900 and advises reducing weak long positions near 16,800 and taking contra positions only around 16,200 and below.
Here are key things to know about the market before the May 5 session:
At 7:40 am on Thursday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — were up 152 points or 0.9 percent at 16,841, suggesting a stronger start ahead on Dalal Street.
Asian shares tracked Wall Street higher amid thin trade after the US central bank raised interest rates by a widely-expected 50 basis points and sounded a less hawkish tone than some had feared. MSCI’s broadest index of Asia Pacific shares outside Japan was up 0.8 percent in early hours.
China’s Shanghai Composite was up 0.6 percent, Hong Kong’s Hang Seng up 1.2 percent and Singapore’s Straits Times flat. Many other markets were shut for Labour Day holidays.
S&P 500 futures edged 0.1 percent lower. On Wednesday, the three main Wall Street indices surged, with the S&P 500 recording its biggest one-day percentage gain in nearly two years. The S&P 500 rose three percent, the Dow Jones 2.8 percent and the technology stocks-heavy Nasdaq Composite 3.2 percent.
What to expect on Dalal Street
HDFC Securities’ Shetti pointed out that the level of 16,800 has been instrumental in a sustainable trend in the 50-scrip index over the past few months. There is a high chance of steep weakness in the near term.
“This anticipated market action could open the possibility of a larger degree of lower bottom below 15,670 in the next few weeks. A bounce from here could find strong resistance around 16,800-17,000 levels, with the immediate downside target to be watched around 16,200,” he said.
Key levels to watch out for
The 50-scrip index sank further below all of its six main simple moving averages in a highly bearish sign. It is 560 points below the 200-day mark:
|
Period (No. of sessions) |
Simple moving average |
| 5 | 17,026.5 |
| 10 | 17,098.9 |
| 20 | 17,352.2 |
| 50 | 17,090.3 |
| 100 | 17,279.6 |
| 200 | 17,237.8 |
Mohit Nigam, Head-PMS at Hem Securities, brought down his resistance and support levels for the 50-strong benchmark by 200 points each:
| Index | Support | Resistance |
| Nifty50 | 16,500 | 17,000 |
| Nifty Bank | 34,500 | 36,000 |
FII/DII activity
Foreign institutional investors (FII) net sold Indian shares worth Rs 3,288.2
crore on Wednesday, according to provisional exchange data. On the other hand, domestic institutional investors (DIIs) net bought shares worth Rs 1,338 crore.
The maximum call open interest is at the strike of 17,000, with 1.7 lakh contracts, and the next highest at 17,200, with 1.5 lakh contracts, according to exchange data. The maximum put open interest is at 16,500, with nearly 89,000 contracts, and the next at 16,000, with more than 88,000 contracts.
This suggests immediate resistance has shifted by 500-odd points to 17,500, and immediate support placed only at 16,500.
Long build-up
Here are five stocks that saw an increase in open interest as well as price:
| Symbol | Current OI | CMP | Price change | OI change |
| TATACHEM | 51,13,000 | 1,041.75 | 10.63% | 19.11% |
| CANFINHOME | 32,02,875 | 638.15 | 7.35% | 11.81% |
| ALKEM | 2,32,800 | 3,276.90 | 0.26% | 8.42% |
| GNFC | 32,12,300 | 836.5 | 0.49% | 7.65% |
| HONAUT | 5,010 | 39,912.50 | 0.09% | 6.59% |
| Symbol | Current OI | CMP | Price change | OI change |
| ASTRAL | 4,86,200 | 2,063 | -4.32% | -12.39% |
| ASHOKLEY | 3,35,74,500 | 126.5 | -0.71% | -6.34% |
| PERSISTENT | 4,89,900 | 4,156 | -3.93% | -4.23% |
| HEROMOTOCO | 33,99,000 | 2,492.05 | -0.77% | -4.22% |
| HAVELLS | 48,07,000 | 1,290 | -1.98% | -3.98% |
(Decrease in open interest as well as price)
Short covering
| Symbol | Current OI | CMP | Price change | OI change |
| HINDPETRO | 1,36,26,900 | 273.95 | 1% | -8.38% |
| PETRONET | 1,67,16,000 | 208.4 | 2.13% | -6.10% |
| LAURUSLABS | 80,28,900 | 595 | 1.88% | -5.15% |
| ITC | 8,71,61,600 | 262.65 | 1.33% | -3.69% |
| TATAPOWER | 9,83,77,875 | 249.35 | 2.72% | -3.40% |
(Increase in price and decrease in open interest)
| Symbol | Current OI | CMP | Price change | OI change |
| DIXON | 5,43,250 | 3,965.50 | -7.77% | 39.42% |
| ESCORTS | 27,80,800 | 1,590 | -3.15% | 37.82% |
| AARTIIND | 22,84,800 | 849.05 | -4.64% | 16.63% |
| MCX | 20,60,100 | 1,432 | -0.03% | 15.82% |
| METROPOLIS | 2,92,000 | 2,269.20 | -3.42% | 11.64% |
(Decrease in price and increase in open interest)
A total of seven stocks on the BSE 500 — the bourse’s broadest index — hit 52-week highs: Indian Hotels, Mahindra Lifespace, Mangalore Refinery, NLC India, Swan Energy, GHCL and Sumitomo Chemical.
52-week lows
A dozen scrips hit 52-week lows.
| 3MINDIA | RALLIS | SPICEJET |
| HDFCAMC | RBLBANK | SUDARSCHEM |
| INFIBEAM | SANOFI | TATACOMM |
| NAUKRI | SOLARA | ZOMATO |
The India VIX — also known as the fear index — surged 7.9 percent to settle at 21.9 on Wednesday, its biggest jump since April 25.
First Published: IST