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This article is more than 2 month old.

Trade Setup for Aug 24: Will weakness persist in broader markets? Check key market cues before Tuesday’s session

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Analysts expect fresh hurdles to emerge for Nifty50 up ahead with some saying that 15,900 is a possibility in the next two weeks. Here's how the August 24 session is poised to start.

Trade Setup for Aug 24: Will weakness persist in broader markets? Check key market cues before Tuesday’s session
Indian equity benchmarks broke a two-day losing streak on Monday, helped by gains in IT stocks and heavyweights such as HDFC Bank and Reliance Industries. Strength in global markets also boosted investors' morale on Dalal Street. Nifty Bank rose mildly while the automobile and metal  shares played spoilsport.
So, what do the charts suggest for Dalal Street?
The 50-scrip index has left a bearish gap between the 16,535.85 and 16,509.55 levels on a daily basis, according to Shrikant Chouhan, Executive Vice President-Equity Technical Research at Kotak Securities.
"The index has formed a bearish hammer pattern on a weekly basis that would invite further concerns. Major hurdles of 16,535 and 16,490 are expected going forward," he said.
Consolidation 
It seems the index is forming a fresh consolidation zone in the range of 16,350-16,600, where choppy trade was witnessed in the past two days, said Rohit Singre, Senior Technical Analyst at LKP Securities.
Here are key things to know about the market before Tuesday's session:
SGX Nifty
At 8:11 am on Tuesday, Nifty futures trading on Singapore Exchange -- an early indicator of India's NSE Nifty50 benchmark index -- were up 97 points or 0.59 percent at 16,592, signalling a positive start ahead on Dalal Street.
Global markets
Equities on other Asian markets rose tracking overnight gains on Wall Street as investors drew comfort from full approval granted to the Pfizer/BioNTech vaccine and on easing worries of an imminent tapering of stimulus by the US central bank. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.2 percent, while Japanese and South Korean indices jumped over 1 percent each.
On Monday, the Nasdaq reached a record closing high as focus shifted to the Jackson Hole Symposium expected to convene later this week. The S&P 500 gauge finished near a record close.
What to expect
"The extremely poor advance-decline ratio might invite further weakness in the market... As the index closed below 16,500 with increased volatility, it may slide to 16,400-16,350 levels in the near term. On the higher side, major obstacles are expected at 16,590 and 16,630," said Chouhan.
"The market is expected to remain volatile with weakness in midcaps and  smallcaps, cautioned Rahul Sharma, Co-Founder of Equity99. IT, FMCG, banking and consumer staples sectors are likely to be in focus on Tuesday, he said.
Key levels to watch out for
Nifty50: Immediate support is coming near 16,450-16,400 levels, and resistance near the 16,550-16,600 zone, according to Singre.
Nifty Bank: Strong support is expected at 34,900, which, if breaks, will be followed by 34,750-34,600 levels. Strong resistance is expected at 35,400, and then 35,650, according to Sharma.
FII/DII activity
Foreign institutional investors withdrew a net Rs 1,363.36 crore from the Indian capital market on Monday. Domestic institutional investors made net purchases of Rs 1,452.51 crore, exchange data showed.
Call/put open interest
The maximum open interest is accumulated at the strike price of 16,600, and then 16,700. On the other hand, there is a high degree of put open interest at the strike price of 16,500, NSE data shows. This indicates that immediate resistance can be expected at 16,600, and then 16,700, and support comes in at 16,500.
Long build-up
Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:
SymbolCurrent OICMPPrice change (%)OI change (%)
MINDTREE19,83,6003,500.504.47%28.25%
MPHASIS7,70,5752,892.651.21%25.26%
HAVELLS32,39,0001,261.102.19%19.47%
ICICIGI17,37,4001,488.951.20%16.61%
HCLTECH1,33,05,6001,167.404.33%14.61%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
EXIDEIND2,00,70,000157.7-1.53%-16.45%
APLLTD17,79,250732.75-0.75%-13.32%
AARTIIND27,31,900910-1.66%-12.51%
NAVINFLUOR4,01,4003,615.70-2.61%-11.55%
LICHSGFIN1,53,88,000366.5-2.37%-11.10%
(Decrease in open interest and price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
UBL16,20,5001,459.750.72%-8.68%
BEL2,28,72,200175.252.46%-5.78%
GRANULES1,06,50,050326.450.40%-5.46%
KOTAKBANK1,09,53,6001,717.100.64%-4.65%
BHARTIARTL7,17,79,929621.91.07%-4.58%
(Decrease in open interest and increase in price)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
TORNTPOWER23,16,000449.35-0.52%19.75%
TATACONSUM66,05,550835.2-1.31%17.07%
TATACHEM95,90,000823.55-1.88%16.89%
DEEPAKNTR22,65,0002,056.95-1.97%15.89%
DABUR1,01,25,000609-0.31%15.69%
(Increase in open interest and decrease in price)
Stocks hitting 52-week highs
TCS, Tech Mahindra, Titan, Hindustan Unilever, Nestle, Bajaj Finserv, Bajaj Finance, HCL Tech, Dabur, Fortis, Godrej Consumer, Havells, Ipca Labs, Mindtree, Mphasis, SRF, Gujarat State Petronet, L&T Infotech and L&T Tech Services were among the stocks that clocked 52-week highs.
Stocks hitting 52-week lows
Hero MotoCorp, Whirlpool, Ujjivan Financial, Ujjivan Small Finance Bank, Aarti Drugs, Amara Raja, Alembic Pharma, Biocon and Gulf Oil Lubricants hit 52-week lows.
Volatility gauge
The India VIX index -- which measures the expectation of volatility in the market -- eased 2.35 percent to 13.69 on Monday, having moved between 12.73 and 14.44 in intraday trade.
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