June30 , 2022

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

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Indian equity benchmarks ended a two-day pullback on Wednesday amid weakness across sectors, as nervousness persisted across global markets on steep hikes in COVID-era interest rates and their impact on economic growth.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a reasonable negative candle on the daily chart, signalling 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 more pain ahead as the market lacks the strength to sustain the upside.

Sideways movement may continue

One can expect more of rangebound action in the market 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 till 15,600-15,650 levels. On the flipside, key support to watch out for is at 15,350, below which, the index could slip till 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 opening ahead on Dalal Street.

Global markets

Equities in other Asian markets were a mixed bag with a positive bias, though caution persisted among investors after Fed Chair Jerome Powell said the US central bank remains “strongly committed” to fight inflation. MSCI’s broadest index of Asia Pacific shares outside Japan was flat at the last count.

Japan’s Nikkei 225 was down 0.1 percent, South Korea’s KOSPI down 0.5 percent and China’s Shanghai Composite flat. Hong Kong’s Hang Seng and Singapore’s Straits Times were up 0.6 percent each.

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

What to expect on Dalal Street

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

“One may expect the Nifty to slide down to the important 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 long-term simple moving average in a bearish signal.

Period (No. 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 key resistance and support levels:

Index Support Resistance
Nifty50 15,200 15,600
Nifty Bank 32,400 33,300

FII/DII activity

Call/put open interest

The maximum call open interest is accumulated 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 put open interest is at 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 the 16,000 mark, and immediate support at 15,200.

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

Stock Current OI CMP Price change OI change
PVR 1,992,672 1,795.85 0.52% 10.29%
POLYCAB 629,100 2,130.25 0.33% 9.97%
SRTRANSFIN 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 unwinding

Stock Current OI CMP Price change OI change
FEDERALBNK 59,830,000 86.85 -1.36% -3.34%
AUBANK 6,677,000 597.8 -2.13% -2.64%
CANFINHOME 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 as well as price)

Short covering

Stock Current OI CMP Price change OI change
RAMCOCEM 3,289,500 600 0.05% -2.84%
RBLBANK 40,640,600 87.15 3.38% -2.61%
BERGEPAINT 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 OI change
HINDCOPPER 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)

52-week highs

No stock in the BSE 500 universe — the broadest index on the bourse — hit the milestone.

52-week lows

A total of 26 stocks in the 500-strong index hit 52-week lows. Three Sensex stocks were among them: Tata Steel, Axis Bank and IndusInd.

First Published:  IST



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