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    Trade setup for Apr 12: More downside on the cards for Nifty50?

    Trade setup for Apr 12: More downside on the cards for Nifty50?

    Trade setup for Apr 12: More downside on the cards for Nifty50?
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    By Sandeep Singh   IST (Updated)

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    Trade setup for Tuesday, April 12: The Nifty50 may be in for more weakness in the holiday-truncated three-day trading week, say experts. Here's what the technical charts suggest for the coming session.

    Indian equity benchmarks began the holiday-truncated week in the red on Monday dragged by financial and IT shares, as investors awaited the onset of the corporate earnings season. Tata Consultancy Services (TCS) shares eked out a mild gain ahead of its financial results for the March quarter.
    What do the charts suggest for Dalal Street now?
    The Nifty50 has formed a small negative candle on the daily chart following a gap-down opening, reflecting sideways movement at the support level of 17,600, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
    The 50-scrip index is placed at its 10-day exponential moving average (EMA) around 17,650, a move below which could drag it to around 17,450, the 20-day level, he said.
    IT in the spotlight
    One can expect the Nifty to continue to face some consolidation in a broad range in the short term with the stock-specific movements, said Ruchit Jain, Lead Research at 5paisa.com.
    He is of the view the Nifty IT is in a corrective phase in near term.
    Here are key things to know about the market before the April 12 session:
    SGX Nifty
    At 7:27 am on Tuesday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were down 154 points or 0.9 percent at 17,588, suggesting a gap-down start ahead on Dalal Street.
    Equities in other Asian markets were largely in the red as US Treasury yields spiked to three-year peaks ahead of data on inflation in the world's largest economy, which could foreshadow even more aggressive rate hikes from the Fed.
    MSCI's broadest index of Asia Pacific shares outside Japan was down 0.1 percent at the last count.
    Japan's Nikkei 225 was down 1 percent, Hong Kong's Hang Seng 0.1 percent, South Korea's KOSPI 1.1 percent and Singapore's Straits Times 0.8 percent. China's Shanghai Composite eked out a gain of 0.1 percent.
    S&P 500 futures were down 0.4 percent.
    Overnight on Wall Street, the three main indices fell as investors started the holiday-shortened week in a risk-off mood. The S&P 500 fell 1.7 percent, the Dow Jones 1.2 percent and the Nasdaq Composite 2.2 percent.
    HDFC Securities' Shetti believes the Nifty50's short-term trend remains weak with rangebound action. "There is no indication of any higher bottom formation. A slide below 17,600-17,500 levels could open more weakness in the near term. A choppy movement within high low of 17,800-17,600 is expected to continue for the short term," he said.
    Independent technical analyst Manish Shah warns that the Nifty is at "a very crucial stage" and has to take out 17,850 in order to rally to assume a rally, and a break below 17,590 can take it all the way to 17,400.
    Levels to watch out for
    Period (No. of days)Simple moving averageSignal
    517,772.8Bearish
    1017,687.6Bearish
    2017,397.5Bullish
    5017,154.1Bullish
    10017,302.8Bullish
    20017,140.5Bullish
    Mohit Nigam, Head-PMS at Hem Securities, pointed out the following levels:
    IndexSupportResistance
    Nifty5017,50017,750
    Nifty Bank37,30037,900
    FII/DII activity
    Foreign institutional investors (FII) net sold Indian shares worth Rs 1,145.2
    crore on Monday, data shows. However, domestic institutional investors (DIIs) made net purchases of Rs 486.5 crore.
    Call/put open interest
    According to provisional exchange data, the maximum call open interest is accumulated at the strike price of 18,000, with 1.7 lakh contracts, and the next highest at 18,500, with 1.4 lakh contracts. On the other hand, the maximum put open interest is at 17,000, with almost 96,000 contracts, and the next highest at 17,500, with nearly 84,000 contracts.
    This suggests immediate resistance at 18,000 followed by the next hurdle at 18,500, and immediate support at 17,500.
    Long build-up

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

    SymbolCurrent OICMPPrice change (%)OI change (%)
    AMBUJACEM2,95,57,500365.157.76%25.93%
    IDFCFIRSTB22,34,76,30042.50.83%1.70%
    IOC5,65,50,000129.351.21%6.88%
    TataMotors8,74,75,050455.50.32%3.21%
    BHEL10,06,42,50056.950.26%2.29%

    Long unwinding

    SymbolCurrent OICMPPrice change (%)OI change (%)
    PNB20,92,16,00037.5-1.19%-1.03%
    FEDERALBNK6,78,70,000100.2-0.30%-1.11%
    SBIN6,98,20,500517.45-0.28%-0.59%
    INDUSTOWER1,75,39,200219.2-0.86%-1.51%
    SBILIFE80,59,5001,145.15-1.79%-2.49%

    (Decrease in open interest as well as price)

    Short-covering
    SymbolCurrent OICMPPrice change (%)OI change (%)
    RBLBANK5,11,35,700132.12.88%-5.04%
    GAIL2,91,03,100165.151.51%-2.19%
    M&MFIN3,53,04,000176.20.34%-1.36%
    RBLBANK46,60,300131.652.29%-9.21%
    HINDCOPPER1,78,02,000125.151.38%-1.92%
    (Increase in price and decrease in open interest)
    Short build-up
    SymbolCurrent OICMPPrice change (%)OI change (%)
    IDEA70,03,50,00010.85-3.98%2.87%
    ITC12,44,83,200267.9-0.39%3.36%
    INFY3,36,30,3001,774.90-2.59%11.32%
    IDFC11,44,80,00062.55-0.40%1.91%
    WIPRO2,91,96,800573.65-2.27%6.98%
    52-week highs
    A total of 27 stocks on the BSE 500 -- the broadest index on the bourse -- hit 52-week highs:
    ADANIENTCHAMBLFERTLINDEINDIA
    ADANIGREENCHOLAFINMINDACORP
    ADANITRANSCREDITACCPAGEIND
    ANGELONECUMMINSINDPOONAWALLA
    ATGLHALRHIM
    BANKBARODAIIFLWAMSCHAEFFLER
    BDLITCSFL
    BELJINDALSTELUFLEX
    CGCLKEIVEDL
    52-week lows
    No BSE 500 stock hit a 52-week low.
    Fear gauge

    The India VIX -- known in market parlance as the fear index -- rose 3.3 percent to settle at 18.3 on Monday. In late February, Russia's move to invade Ukraine had sent the VIX soaring to a 20-month peak of almost 34.

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