Nifty50 Poised For A Pullback? Check Out Key Market Cues Before Tuesday’S Session
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Indian equity benchmarks began the week on a sharply negative note amid a broad-based sell-off on Monday. Financial, IT and oil & gas shares were the biggest drags for both headline indices, which dropped for a third straight session.
The Bank Nifty fell two percent, taking its losses in four sessions to almost 3.5 percent.
What do the charts suggest for Dalal Street now?
Monday’s steep fall is yet another instance of market action seen in the past few months wherein sharp weakness occurs at higher or lower tops, he said.
Time to buy the dip
Ruchit Jain, Lead Research, 5paisa.com, believes the dip offers a good opportunity for investors from a medium-term perspective.
“We expect this to be the last leg of this corrective phase. Traders should start to look for stock-specific buying opportunities from a delivery perspective,” he said.
Here are key things to know about the market before the February 8 session:
SGX Nifty
At 7:48 amm on Tuesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — were up 24.5 points or 0.1 percent at 17,238.5, suggesting a mildly positive opening ahead on Dalal Street.
Global markets
Equities in other Asian markets started the day on a mixed note, with MSCI’s broadest index of Asia Pacific shares outside Japan down 0.2 percent.
Japan’s Nikkei 225 was up 0.4 percent, South Korea’s KOSPI 0.8 percent and Singapore’s Straits Times 0.8 percent, but China’s Shanghai Composite down 0.1 percent and Hong Kong’s Hang Seng 0.9 percent.
S&P 500 futures were flat. On Monday, the three main Wall Street indices ended broadly lower. The S&P 500 fell 0.4 percent and the Nasdaq Composite 0.6 percent, though the Dow Jones finished flat.
What to expect on Dalal Street
HDFC Securities’ Shetti believes that the Nifty50’s near-term trend remains negative, with a pickup in downside momentum. “There is a possibility the index will hit lower support at around 16,950-16,850 levels in the next few sessions before another round of minor upside from the lows. Immediate resistance is placed at 17,300,” he said.
Jain of 5paisa.com expects a pullback in the 50-scrip index in the next couple of sessions as long as it holds the 17,000 mark.
“The Nifty has retraced 61.8 percent its recent upmove and is trading around short-term support… On the flipside, immediate resistance can be seen at 17,325 and 17,500 in the pullback move. In the near term, a lot would depend on how the stronger hands (FIIs) position themselves in the futures segment and until they start covering short positions, our market would continue to see selling pressure on pullbacks,” he said.
Key levels to watch out for
Nifty50: Immediate support for the index is expected at 17,045, and resistance at 17,350, according to Mohit Nigam, Head-PMS at Hem Securities.
Nifty Bank: For the banking index, he sees support at 37,700 and resistance at 38,500.
Provisional exchange data shows foreign institutional investors (FIIs) net sold Indian equities worth Rs 1,157.2 crore on Monday. Net sales by domestic institutional investors (DIIs) stood at Rs 1,376.5 crore.
Exchange data shows the maximum call open interest is accumulated at the strike price of 18,000, with 1.7 lakh contracts, and 17,800, with 1.3 lakh contracts. On the other hand, the maximum put open interest is placed at 17,000, with nearly 80,000 contracts.
This suggest resistance at 17,800 followed by 18,000, and meaningful support at the 17,000 mark.
Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| GNFC | 25,14,200 | 515.8 | 12.93% | 25.44% |
| HONAUT | 7,425 | 45,109.70 | 1.09% | 17.78% |
| HINDCOPPER | 1,42,63,100 | 141.55 | 2.42% | 14.38% |
| DALBHARAT | 4,60,000 | 1,983.05 | 2.26% | 10.98% |
| INDIGO | 31,79,750 | 2,169.70 | 9.74% | 10.83% |
Long unwinding
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| PERSISTENT | 3,96,750 | 4,234.55 | -1.78% | -3.40% |
| OBEROIRLTY | 26,13,800 | 914.4 | -3.68% | -2.33% |
| COFORGE | 6,09,800 | 4,630 | -1.34% | -1.85% |
| SUNPHARMA | 2,45,73,500 | 880.3 | -1.07% | -1.66% |
| CANBK | 4,56,03,000 | 258.3 | -1.41% | -1.48% |
(Decrease in open interest as well as price)
Short-covering
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| GUJGASLTD | 21,52,500 | 694 | 1.52% | -3.60% |
| M&MFIN | 3,78,48,000 | 155.05 | 1.01% | -3.00% |
| SHREECEM | 1,69,425 | 24,836.95 | 0.44% | -0.90% |
| GAIL | 2,99,75,400 | 148 | 0.78% | -0.75% |
(Increase in price and decrease in open interest)
Short build-up
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| LUPIN | 76,21,950 | 805.95 | -7.68% | 37.36% |
| AARTIIND | 22,90,750 | 987 | -2.12% | 35.25% |
| TORNTPOWER | 36,82,500 | 511 | -10.95% | 27.09% |
| MFSL | 15,08,000 | 867.95 | -2.21% | 17.28% |
| CHOLAFIN | 71,78,750 | 649.7 | -3.73% | 13.34% |
(Increase in open interest and decrease in price)
52-week highs
As many as 12 stocks in the BSE 500 pack hit 52-week highs, including SBI, Bank of Baroda, Adani Green, GMFC, Cholamandalam Investment, Deepak Fertilisers, VIP Industries and Narayana Hrudayalaya.
52-week lows
HDFC Life, Lupin, MCX, MRF, Jubilant Pharma and Gillette hit 52-week lows.
Volatility gauge
NSE’s India VIX index — which gauges the expectation of volatility in the market — surged 8.2 percent to settle at 18.9 on Monday, its biggest jump since January 24.
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