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    Trade setup for Apr 21: Nifty50 back above 17,000 but can it extend the pullback?

    Trade setup for Apr 21: Nifty50 back above 17,000 but can it extend the pullback?

    Trade setup for Apr 21: Nifty50 back above 17,000 but can it extend the pullback?
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    By Sandeep Singh   IST (Updated)

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    Trade setup for Thursday, April 21: The Nifty50 is yet to cross its 200 DMA through it may continue the pullback for now, say experts. Here's what the technical charts suggest for the coming session.

    Indian equity benchmarks made a comeback on Wednesday following a losing streak that stretched to five back-to-back sessions. Strength in IT stocks and heavyweights such as Reliance Industries and the HDFC twins aided the rebound in headline indices.
    The Nifty50 reclaimed the 17,000 mark -- a level it had lost the previous day after one month -- and crossed its 50-day moving average.
    What do the charts suggest for Dalal Street now?
    The Nifty50 has formed a reasonable positive candle on the daily chart with minor upper and lower shadows, hinting at an inside bar-type pattern, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
    This raises hopes for a pullback rally in the market, he said.

    Period (No. of days)

    Simple moving average
    517,255
    1017,513.9
    2017,465.5
    5017,132.5
    10017,285.6
    20017,177.4
    Bulls back in action
    Despite the bounceback, the 50-scrip index is still below its 200-day moving average in a broadly negative sign, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. However, a continuation of the pullback is not ruled out if it succeeds to trade above 17,050.
    He sees 17,050 to act as a trend-deciding level for traders, above which, the rally could continue up to 17,250-17,350 levels. But the uptrend will be vulnerable below 17,050, with chances of hitting 16,950-16,900, he said.
    Here are key things to know about the market before the April 21 session:
    SGX Nifty
    At 7:12 am on Thursday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were up 86.5 points or 0.5 percent at 17,233, suggesting a higher opening ahead on Dalal Street.
    Equities in other Asian markets began the day on a mixed note, mirroring the moves on Wall Street overnight. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.1 percent in early hours.
    Japan's Nikkei 225 was up 1.1 percent, South Korea's KOSPI 0.6 percent and Singapore's Straits Times 0.7 percent. China's Shanghai Composite was down 0.1 percent and Hong Kong's Hang Seng 0.4 percent.
    S&P 500 futures were up half a percent. On Wednesday, the S&P 500 finished a choppy session flat, and bleak Netflix earnings dragged the technology stocks-heavy Nasdaq Composite 1.2 percent. The Dow Jones rose 0.7 percent as bond yields cooled off from recent peaks.
    What to expect on Dalal Street
    HDFC Securities' Shetti is of the view that a decisive move above 17,300 is likely to confirm a reversal pattern after the higher bottom of 16,825. "That could possibly take the Nifty towards further upside. Immediate support is placed at 17,000," he said.
    The 50-scrip index needs to take out its 200-day moving average to bring the bulls back in action, said Prashanth Tapse, Vice President (Research) at Mehta Equities. He advises caution till the Nifty closes above 17,621. 
    Levels to watch out for
    Choice Broking Analyst Palak Kothari pointed out the following levels: 
    IndexSupportResistance
    Nifty5016,80017,240
    Nifty Bank36,00037,000
    FII/DII activity
    Foreign institutional investors (FII) net sold Indian shares worth Rs 3,009.3 crore on Wednesday -- a ninth straight day of outflow for the Street -- though domestic institutional investors (DIIs) made net purchases of Rs 2,645.8 crore, according to provisional exchange data. 
    Call/put open interest
    The maximum call open interest is accumulated at the strikes of 17,500 and 17,600, with around 1.5 lakh contracts each, and the maximum put open interest is at 17,000 and 16,000, with one lakh contracts each, according to provisional exchange data.
    This suggests immediate resistance at 17,500 and a cushion at the 17,000 mark.
    Long build-up

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

    SymbolCurrent OICMPPrice change (%)OI change (%)
    IDEA14,58,10,00010.050.50%11.21%
    IDFCFIRSTB2,55,85,50040.250.25%16.24%
    AMBUJACEM26,59,500377.76.23%161.50%

    Long unwinding

    SymbolCurrent OICMPPrice change (%)OI change (%)
    ITC10,34,65,600260.65-0.52%-5.35%
    GMRINFRA13,61,16,000102.1-1.97%-2.77%
    NATIONALUM10,23,75,00036.95-0.27%-2.47%
    ZEEL7,79,19,500119.3-0.13%-2.68%
    RBLBANK7,94,28,000266-0.60%-2.15%

    (Decrease in open interest as well as price)

    Short-covering
    SymbolCurrent OICMPPrice change (%)OI change (%)
    TATAMOTORS7,39,06,200442.53.97%-6.94%
    TATAPOWER8,59,20,7502501.56%-3.82%
    BHARTIARTL4,61,34,850739.452.04%-4.04%
    BHEL9,38,91,00054.050.84%-1.83%
    FSL1,11,64,400128.12.56%-11.46%
    (Increase in price and decrease in open interest)
    Short build-up
    SymbolCurrent OICMPPrice change (%)OI change (%)
    SAIL1,79,55,000760.65-1.91%35.87%
    ICICIBANK1,06,98,875260.5-0.80%36.72%
    ITC1,44,19,200113.45-0.46%20.32%
    BANKBARODA1,09,27,800119.6-0.26%22.57%
    52-week highs
    A total of six stocks on the BSE 500 -- the bourse's broadest index -- hit 52-week peaks: Coal India, MRPL, Swan Energy, Mangalore Refinery, Varun Beverages and Capri Global Capital.
    52-week lows
    No BSE 500 stock hit a 52-week low.
    Fear gauge

    The India VIX -- known in market parlance as the fear gauge -- dropped 5.6 percent to 18.7 on Wednesday. In late February, Russia's move to invade Ukraine had sent the VIX soaring to almost 34.

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