By Sandeep Singh Apr 26, 2022 7:35:37 AM IST (Updated)
Trade setup for Tuesday, April 26: A pullback may be just around the corner for the Nifty50, say experts. Here's what the technical charts suggest for the coming session.
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Indian equity benchmarks suffered sharp losses on Monday, extending losses to a second straight session, tracking weakness across global markets amid concerns about aggressive monetary policy action by central banks to curb worsening inflation. However, gains in heavyweights such as ICICI Bank and the HDFC twins lent some support.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a small negative on the daily chart with minor upper and lower shadows, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. He said buying can emerge from close to 16,800.
"The index is placed at the support of its previous swing low (April 19) and its 200-day exponential moving average around 16,850. The lower end of a crucial doji pattern on the weekly chart is at 16,850, where a reasonable bounce has occurred in the recent past," he said. (Check out key factors and events to track this week)
More weakness ahead?
A bearish candle following a gap-down along with a lower top formation on the intraday chart is a broadly negative sign, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
"The Nifty is trading below its 50- and 200-day simple moving averages, hinting at weakness from current levels," he said.
Here are key things to know about the market before the April 26 session:
SGX Nifty
At 7:35 am on Tuesday, Singapore Exchange (SGX) Nifty futures were up 96 points or 0.6 percent at 17,091, suggesting a higher opening ahead on Dalal Street.
Global markets
Equities in other Asian markets largely rose on Tuesday tracking overnight gains on Wall Street, after Twitter's agreement to be bought by billionaire Elon Musk sparked a rally in growth stocks. MSCI's broadest index of Asia Pacific shares outside Japan was up half a percent in early hours.
Japan's Nikkei 225, Hong Kong's Hang Seng and South Korea's KOSPI were up 0.6 percent each. China's Shanghai Composite was down 0.5 percent and Singapore's Straits Times 0.4 percent.
S&P 500 futures were flat. On Monday, the S&P 500 rose 0.6 percent, the Dow Jones 0.7 percent and the technology stocks-heavy Nasdaq Composite 1.3 percent.
What to expect on Dalal Street
Kotak Securities' Chouhan believes one can expect a fresh pullback rally till 17,100-17,150 levels above 17,000, a key level to watch out for below which it is is likely to retest the 16,850-16,800 zone.
Caution is likely to be the buzzword until the index is able to take out its 200-day moving average, said Prashanth Tapse, Vice President (Research) at Mehta Equities. "A much more severe sell-off looms over Dalal Street that could take the Nifty towards 16,807 and then 16,597," he said.
Levels to watch out for
The 50-scrip index gave up its five- and 50-day moving averages. It is now below all of the six main levels:
| Period (No. of trading days) | Simple moving average | Signal |
| 5 | 17,122.7 | Bearish |
| 10 | 17,325.3 | Bearish |
| 20 | 17,452.2 | Bearish |
| 50 | 17,122.9 | Bearish |
| 100 | 17,284.6 | Bearish |
| 200 | 17,199.3 | Bearish |
Mohit Nigam, Head-PMS at Hem Securities, mentioned the following levels to watch out for:
| Index | Support | Resistance |
| Nifty50 | 16,750 | 17,250 |
| Nifty Bank | 35,500 | 36,650 |
FII/DII activity
Foreign institutional investors (FII) net sold Indian shares worth Rs 3,302.9 crore on Monday, according to provisional exchange data. However, domestic institutional investors (DIIs) made net purchases of Rs 1,870.5 crore.
Call/put open interest
Data shows that the maximum call open interest is accumulated at the strike of 17,800, with 1.7 lakh contracts, and the next highest at 17,500, with 1.6 lakh contracts. The maximum put open interest is at 16,000, with 1.2 lakh contracts, and then 16,500, with almost 93,000 contracts.
This suggests major resistance at 17,500 followed by 17,800, and immediate support 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 (%) |
| PIIND | 14,75,750 | 2,877 | 0.01% | 33.68% |
| BANDHANBNK | 3,41,49,600 | 333.45 | 1.09% | 15.39% |
| BAJAJ-AUTO | 16,80,500 | 3,711.20 | 1.66% | 11.95% |
| INTELLECT | 12,48,000 | 835 | 2.35% | 11.36% |
| CUB | 1,11,45,200 | 134.75 | 0.04% | 11.35% |
Long unwinding
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| APLLTD | 13,93,000 | 766.05 | -0.27% | -20.75% |
| L&TFH | 4,51,46,516 | 87.35 | -1.85% | -18.84% |
| HDFCAMC | 29,73,400 | 2,013 | -1.56% | -16.14% |
| AARTIIND | 17,79,050 | 890.8 | -3.44% | -14.86% |
| COALINDIA | 3,70,81,800 | 189.9 | -6.08% | -14.17% |
(Decrease in open interest as well as price)
Short covering
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| MRF | 89,710 | 69,149.95 | 0.21% | -14.58% |
| POLYCAB | 7,28,400 | 2,556.20 | 1.19% | -13.43% |
| DIXON | 5,81,250 | 4,288.90 | 0.54% | -12.09% |
| ASTRAL | 5,67,050 | 2,173.40 | 0.80% | -9.60% |
| GUJGASLTD | 25,85,000 | 525.8 | 2.14% | -8.08% |
(Increase in price and decrease in open interest)
Short build-up
| Symbol | Current OI | CMP | Price change (%) | OI change (%) |
| MFSL | 17,28,350 | 728.15 | -1.56% | 36.78% |
| BATAINDIA | 14,19,000 | 1,909.50 | -0.45% | 31.63% |
| BHARATFORG | 48,47,250 | 704.1 | -2.80% | 26.89% |
| BALKRISIND | 10,93,000 | 2,031 | -4.18% | 18.15% |
| UBL | 11,42,400 | 1,531.95 | -1% | 17.16% |
(Decrease in price and increase in open interest)
52-week highs
Three stocks on the BSE 500 -- the broadest index on the bourse -- managed to clock 52-week highs in the overall weak market: Adani Power, Swan Energy and Vinati Organics.
52-week lows
Only one stock hit a 52-week low: Pfizer.
Fear gauge
The India VIX -- known in market parlance as the fear index -- jumped 15.8 percent to end at 21.3. In late February, Russia's move to invade Ukraine had sent the VIX soaring to a 20-week high.
First Published: Apr 25, 2022 7:20 PM IST
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