July4 , 2022

Nifty50 May Sustain Pullback Till Next Hurdle At 15,700-15,800

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Indian equity benchmarks surged on Tuesday backed by broad-based gains, rising for a second straight day following a six-day sell-off that took away seven percent of their value. However, fears of aggressive rate hikes and their impact on economic growth kept investors cautious.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a long bull candle on the daily chart in a positive sign, confirming a short term bottom reversal, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

The 50-scrip index faces crucial resistance around 15,700-15,800 levels, where weakness may emerge, he said.

Key support at 15,250

The near-term trend in the Nifty is on the weak side, even as the daily chart supports a further uptrend up to 15,850, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

“For traders, support has shifted to 15,500 from 15,250 on the Nifty. As long as the index is trading above 15,500, the chances of it hitting 15,750 are bright,” he said.

Here are key things to know about the market ahead of the June 22 session:

SGX Nifty

Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — declined as much as 46.5 points or 0.3 percent to 15,576 early on Wednesday, suggesting a muted start ahead on Dalal Street.

Global markets

Equities in other Asian markets began the day in the red, despite positive cues overnight from Wall Street where investors returned to trade after a long weekend, as investors remained nervous about aggressive hikes in interest rates and the prospect of slowing growth. MSCI’s broadest index of Asia Pacific shares outside Japan was down 0.7 percent at the last count.

Japan’s Nikkei 225 was down 0.3 percent, China’s Shanghai Composite 0.2 percent and Hong Kong’s Hang Seng 0.6 percent.

S&P 500 futures were down 0.6 percent. On Tuesday, the three main Wall Street indices jumped as investors scooped up megacap growth and energy stocks. The S&P 500 and the Nasdaq Composite rose 2.5 percent each, and the Dow Jones 2.2 percent.

What to expect on Dalal Street

HDFC Securities’ Shetti believes any consolidation or minor weakness in the next few sessions could lead to a sharp upside breakout at 15,800.

“The fear of missing out can rule traders’ mindsets where bargain hunting and value buying could be the probable theme,” said Prashanth Tapse, Vice President (Research) at Mehta Equities. The inter-week trading theme could shift to enthused bulls and arrested bears as long as the index stays above the make-or-break support level of 15,363, he said.

Important levels to track

The Nifty50 is nine percent below its long-term simple moving average, though it has crossed its five-day level.

Period (No. of sessions)

Simple moving average
5 15,467
10 15,787.8
20 16,119.7
50 16,482.6
100 16,807.7
200 17,224.1

Mohit Nigam, Head-PMS at Hem Securities, pointed out key resistance and support levels:

Index Support Resistance
Nifty50 15,400 15,800
Nifty Bank 32,700 33,700

FII/DII activity

Call/put open interest

The maximum call open interest is accumulated at the strike price of 16,000, with two lakh contracts, and the next highest at 16,200, with 1.1 lakh contracts, according to exchange data.

The maximum put open interest is at 15,000, with 1.4 lakh contracts, and the next at 15,300, with 1.1 lakh.

This suggests strong resistance at the 16,000 mark and immediate support at 15,300 before a strong cushion at 15,000.

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

Stock Current OI CMP Price change OI change
IDFCFIRSTB 203,396,400 30.55 2.17% 28.09%
VEDL 48,059,300 238.2 3.07% 20.23%
NTPC 63,606,300 140.45 1.85% 11.15%
DELTACORP 12,732,800 179.45 1.82% 10.62%
NAVINFLUOR 348,750 3,625 5.06% 10.00%

Long unwinding

Stock Current OI CMP Price change (%) OI change (%)
ALKEM 200,600 3,087.35 -1.09% -1.99%
PAGEIND 100,815 39,119 -1.93% -1.41%

(Decrease in open interest as well as price)

Short covering

Stock Current OI CMP Price change OI change
GNFC 2,823,600 587.5 8.12% -9.21%
APLLTD 1,077,300 728.25 2.42% -5.13%
RECLTD 26,484,000 116.05 4.55% -4.87%
AMARAJABAT 5,853,000 465.1 4.13% -4.24%
IEX 35,051,250 174.75 3.25% -4.12%

(Increase in price and decrease in open interest)

Stock Current OI CMP Price change OI change
MARICO 9,939,000 483.4 -0.39% 3.74%
PIDILITIND 3,055,750 2,096.50 -0.21% 3.36%
CROMPTON 2,895,200 325.95 -1.17% 3.04%

(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 10 stocks in the 500-strong index hit 52-week lows: Bharat Petroleum, IDFC First, JK Cement, NCC, Alok, Jubilant Pharmova, KNR Constructions, Orient Electric, Punjab & Sind Bank and V-Mart.

First Published:  IST



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