MARKETS

Can Nifty Test Key Hurdle At 16,800 Soon? From Market Cues To Technical Signals To Key Levels To Track

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Indian equity benchmarks managed to extend gains to a fourth straight session on Friday but lost steam, as advances in pharma and select financial stocks were countered by declines in auto stocks. Overall, newsflow on the Russia-Ukraine war remained on investors’ radar.

What do the charts suggest for Dalal Street now?

Tea Nifty50 has formed a small positive candle at the highs on the daily chart, reflecting rangebound action in the marketaccording to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
This cooling off of the short-term trend was due after a sharp upmove of around 1,000 points in the previous three sessions. Further consolidation with high volatility is expected given the index is near crucial overhead resistance at 16,800-170,00 levels,” he said. (Key factors to watch this week

)

Nifty faces a key hurdle

“The market appears to have all the ingredients in place for confirming a bottom, but further confirmation is awaited given the war scenario… We have already changed our stance in the last couple of sessions,” Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One, told CNBCTV18.com.

“A key hurdle remains at 16,750-16,800, any sustainable move above which will confirm Tuesday’s low (15,671.5) as a bottom. On the other hand, 16,450 followed by 16,200 are immediate supports,” he said.

Here are key things to know about the market before the March 14 session:

Global markets

On Friday, the three main Wall Street indices tumbled as tech and growth shares led to a broad decline and investors worried about the conflict in Ukraine. The S&P 500 fell 1.3 percent, the Dow Jones 0.7 percent and the Nasdaq Composite 2.2 percent.

Earlier in the day, European shares rose amid signals from Russian President Vladimir Putin about a positive shift in talks with Ukraine. The pan-European Stoxx 600 index rose one percent. The UK’s FTSE index rose 0.8 percent, France’s CAC 0.9 percent and Germany’s DAX 1.4 percent.

What to expect on Dalal Street

Despite having bounced back from 15,700 to form a long bullish candle on the weekly chart in a broadly positive sign, the index is still below its 20-day simple moving average and maintains a lower top formation on the daily timeframe, said Amol Athawale, Deputy Vice President-Technical Research at Kotak Securities.

He is of the view that the Nifty50 has completed one leg of a pullback rally but market texture suggests the strong possibility of rangebound activity in the near future. Athawale expects the uptrend formation to continue unless the index slips below 16,300.

HDFC Securities’ Shetti believes the short-term uptrend is intact but expects high volatility. “Weakness from the highs can’t be ruled out in Monday’s session. Immediate support to be watched is at 16,450,” he said.

Levels to watch out for

Mohit Nigam, Head-PMS at HEM Securities pointed out the following levels:

Index Support Resistance
Nifty50 16,300 16,800
NiftyBank 33,800 35,500

FII/DII activity

Foreign institutional investors (FIIs) net sold Indian equities worth Rs

2,263.9 crore on Fridayaccording to provisional exchange data. However, domestic institutional investors (DIIs) made net purchases to the tune of Rs 1,686.9 crore.

Exchange data shows the maximum call open interest is accumulated at the strike price of 17,500, with more than 87,800 contracts, and the next highest at 17,000, with about 79,450 contracts. The maximum put open interest at 16,000, with almost 70,600 contracts.

This suggests the Nifty is approaching major resistance at 17,000, and has meaningful support some 630 odd points away at 16,000.

Long build-up

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

symbol Current OI CPM Price changes (%) OI change (%)
Vodafone Idea 5,83,80,000 10.5 0.96% 4.25%
SAIL 88,54,000 99.5 0.15% 24.35%
Balrampur Chini 87,98,400 490.55 9.04% 20.28%
cipla 1,01,60,150 1,048.00 5.78% 15.63%

Long unwinding

symbol Current OI CPM Price changes (%) OI change (%)
Hindalco 3,17,66,250 590.5 -0.95% -3.25%
Adani Ports 8,11,83,750 729.6 -0.21% -0.67%
Ashok Leyland 1,41,68,000 1,728.95 -0.08% -3.01%
Infosys 4,21,47,000 106.2 -0.79% -0.93%
Adani Enterprises 3,25,00,200 1,831.05 -0.09% -1.04%

(Decrease in open interest as well as price)

Short covering

symbol Current OI CPM Price changes (%) OI change (%)
ITC 11,12,41,600 235.8 1.55% -2.21%
GNP 15,90,72,000 36.45 1.39% -1.32%
GAIL 2,91,33,600 149.35 3.04% -5.72%

(Increase in price and decrease in open interest)

symbol Current OI CPM Price changes (%) OI change (%)
Manappuram 2,43,12,000 117.5 -3.17% 4.11%
Tata Motors 7,34,70,150 420.05 -0.18% 2.96%

(Increase in open interest and decrease in price)

Six stocks in the BSE 500 universe hit 52-week highs: Sun Pharma, Cipla, Balrampur Chini, GNFC, GHCL and Narayana Hrudayalaya.

One stock on the index hit a 52-week low: Procter & Gamble Health.

The India VIX — also known as the fear index — eased 0.9 percent to settle at 25.4 on Friday. Last month, Russia’s move to invade Ukraine had sent the index soaring to a 20-month high of almost 34.

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