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Trade setup for Nov 23: More pain ahead for D-Street bulls? Check out key market cues before Tuesday's session

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The Nifty50 has formed a big bearish candle on the daily chart, according to Chandan Taparia of Motilal Oswal Financial Services. Here's what the technical charts suggest for the coming session on Dalal Street.

Trade setup for Nov 23: More pain ahead for D-Street bulls? Check out key market cues before Tuesday's session
Indian equity benchmarks tumbled two percent each -- their worst single-day plunge since April -- in a highly volatile session on Monday. A sell-off across sectors, led by financial, oil & gas, automobile and IT shares, pulled the headline indices lower. The market crash comes at a time when the Nifty50 has broken a series of records in a near one-sided rally in the past 18 months.
NSE's India VIX index — which gauges the expectation of volatility in the near term — surged 17.9 percent to 17.5, its biggest spike since February 26.
What do the charts suggest for Dalal Street now?
The 50-scrip index has formed a big bearish candle on the daily chart, and made lower highs and lower lows for four straight sessions, according to Chandan Taparia, Vice President-Equity Derivatives and Technical, Broking and Distribution, Motilal Oswal Financial Services.
Till the Nifty50 remains below 17,500, weakness could continue towards 17,250 and 17,000 with a key hurdle at 17,650 and 17,777 on the upside, he said.

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Brace for 17,000
The index has moved below crucial support at its 10-week exponential moving average of 17,650 and headed lower, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
"The market seems to have entered a sharp downward correction. The overall chart pattern looks weak and more weakness could be in store in the near term. A minor pullback rally from the lows can’t be ruled out in the short term, before another round of weakness... Lower levels of 17,000-16,800 need to be watched in the next few weeks," he said.
Here are key things to know about the market before Tuesday's session:
SGX Nifty
At 7:39 am on Tuesday, Nifty futures trading on Singapore Exchange were down 63 points or 0.4 percent at 17,383, suggesting a weak opening ahead on Dalal Street.
Global markets
Equities in other Asian markets largely declined following a jump in US Treasury yields as Federal Reserve Chairman Jerome Powell’s renomination to head the Federal Reserve fueled bets on quicker policy tightening. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.7 percent. China's Shanghai Composite was up 0.2 percent. S&P 500 futures were flat in early Asian trade.
Overnight on Wall Street, the three main indices ended on a mixed note with the technology stocks-heavy Nasdaq Composite gauge dropping 1.3 percent. The S&P 500 fell 0.3 percent and the Dow Jones managed to eke out a gain of almost 0.1 percent.
What to expect on Dalal Street
Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One, said Monday's fall validates his cautious stance. He expects small rebounds in the market, which he believes is a bit oversold, but sees a high possibility of further correction.
"After 17,250, the Nifty is likely to continue this weakness towards the psychological level of 17,000; where one needs to reassess the situation. On the other hand, immediate hurdles are now placed at 17,500-17,650 levels. Traders are advised to use recoveries to lighten up longs and avoid hurring to bottom fish," he said. 
Independent technical analyst Manish Shah expects the Nifty to drop to 17,400 over the next couple of days, advising traders to take positions with a view of a couple of months.
Key levels to watch out for
Nifty50: Mild resistance for the Nifty50 is expected at 17,500 and support comes in at 17,200, according to Mohit Nigam, Head-PMS at Hem Securities.
Bank Nifty: For the banking index, support is seen at 36,700 and resistance at 38,300, he said.
FII/DII activity
Foreign institutional investors (FIIs) net offloaded Indian equities worth Rs 3,438.8 crore on Monday. However, domestic institutional investors made net purchases of Rs 2,051.2 crore, according to provisional exchange data.
Call/put open interest
The maximum open interest is at the strike price of 18,000 with 1.6 lakh contracts, and the next highest at 17,800 with 1.2 lakh contracts, whereas the highest put open interest is accumulated at the 17,000 mark, with around 79,750 contracts, NSE data shows. This suggests immediate resistance can be expected at 17,800 followed by a major hurdle now at 18,000 instead of 18,200, and support comes in at 17,000.
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 (%)
PEL33,56,9252,5891.16%15.15%
PIIND15,77,7502,881.450.26%4.45%
ASIANPAINT31,61,7003,262.101.03%4.13%
POWERGRID1,86,06,837194.050.70%4.04%
HINDALCO2,23,44,950443.20.43%3.34%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
RECLTD3,89,82,000133.8-1.65%-17.39%
IBULHSGFIN3,32,28,900205.05-5.24%-16.27%
BSOFT31,05,700459.95-2.14%-15.61%
BIOCON1,27,62,700358.05-2.35%-13.16%
GRANULES1,24,34,100305.6-0.08%-11.61%
(Decrease in open interest and price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
SYNGENE10,93,100605.50.10%-9.80%
IDEA63,89,60,00010.555.50%-8.86%
IRCTC94,39,6258900.03%-8.68%
BRITANNIA13,80,0003,5880.18%-5.84%
JSWSTEEL3,48,28,650660.41.54%-4.83%
(Increase in price and decrease in open interest)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
SIEMENS16,23,3252,261.15-2.38%29.49%
ALKEM6,28,2003,280-5.97%26.97%
BATAINDIA17,79,2502,070.05-3.61%15.24%
HDFC1,07,64,6002,892.30-1.11%13.05%
MFSL20,05,250925.6-2.41%12.25%
(Increase in open interest and decrease in price)
52-week highs
Bharti Airtel, Escorts, Raymond, Solar Industries and Tanla were among the 10 stocks in the BSE 500 index — the broadest gauge on the bourse — that hit 52-week highs.
52-week lows
Seventeen stocks in the index hit 52-week lows, including Hero MotoCorp, Lupin, Aurobindo Pharma, Strides Pharma Science, Aarti Drugs, Aegis Logistics, Amara Raja and Spandana Sphoorty.
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