Indian equity benchmarks finished the last session of 2021 on a positive note, led by gains across sectors especially financial, consumer and auto stocks. The Nifty Bank gained 1.2 percent.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a log bull candle on the daily chart in a positive sign, and one one may expect more upside in the short term, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

Long-term charts indicate a bounce from lower supports, and the quarterly chart has closed with a doji or high wave-type formation, “which means a confusion state of mind at the highs,” he said.

Nifty to start New Year higher

Given the way the 50-scrip index closed above 17,300, the New Year is likely to kick off on a positive note, said Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One. He suggests conservative traders to wait for a sustainable close above the 17,400 mark, which is the higher end of a downward sloping channel on the daily chart.

“But the way individual stocks are behaving, it is likely to happen in the coming session only. After this, the immediate levels to watch out will be around 17,550-17,700. On the flipside, the base is shifting higher towards 17,000- 16,800, before which 17,150 is to be considered key support,” he said.

Here are key things to know about the market before the first trading session of 2022:

Global markets

Wall Street’s main indices dropped 0.2-0.6 percent on Friday but logged their best three-year run since 1999  driven by the massive stimulus, vaccine rollouts and strong retail participation. Ten of 11 major S&P sectors gained amid quiet trading, with energy leading the charge.

Earlier that day, European shares ended marginally lower amid surging COVID-19 infections around the world and on worries over the pace of global economic recovery from the pandemic. The pan-European Stoxx 600 index ended nearly unchanged.

What to expect on Dalal Street

HDFC Securities’ Shetti believes the short-term trend of the Nifty50 remains positive. “A sustainable move above 17,640 is likely to negate the bearish setup and that could open more upside going by the daily and weekly charts. Immediate support is placed at 17,260,” he said.

The Nifty50 has formed a long bullish candle on the weekly chart, which supports a short-term uptrend, said Amol Athawale, Deputy Vice President-Technical Research at Kotak Securities.

“But 17,600 or the 50-day simple moving average (SMA) could act as important resistance for the traders. In the near future, as long as the index is holding 17,200 or the 20-day SMA, the chances of it hitting 17,550-17,600 levels are bright. Further upside may also continue, which could lift it up to 17,725-17,800 levels. On the flipside, a close below the 20-day SMA could see the Nifty fall to 17,050-16,950,” he said.

Key levels to watch out for

Nifty50: Immediate support for the index remains at 17,200 and immediate support at 17,500, according to Mohit Nigam, Head-PMS at Hem Securities.

Bank Nifty: For the banking index, Nigam sees immediate support at 35000 and immediate resistance at the 36,000 mark.

Foreign institutional investors (FIIs) net purchased Indian equities worth Rs 575.4 crore on Friday. Domestic institutional investors made net buys of Rs 1,165.6 crore, according to provisional exchange data.

However, Indian equities have logged a third straight month of FII outflows.

The maximum call open interest is accumulated at the strike price of 18,000, with around 80,200 contracts, and there is a high degree of put open interest at 17,300 and 17,200, with 73,000 contracts each, according to exchange data.

This suggests major resistance at the 18,000 mark and immediate support around 17,300-17,200 levels.

Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:

Symbol Current OI CMP Price change (%) OI change (%)
CIPLA 31,42,750 951.75 1.49% 51.62%
HDFC 28,39,200 2,579.10 0.44% 48.85%
TECHM 35,53,800 1,805.05 0.85% 47.61%
BERGEPAINT 9,71,300 760.05 0.93% 45.87%
SBILIFE 23,75,250 1,196 0.93% 44.90%

Long unwinding

Symbol Current OI CMP Price change (%) OI change (%)
TVSMOTOR 15,96,000 614.85 -1.35% -58.77%
STAR 13,34,475 444.5 -1.28% -49.57%
GRANULES 41,46,250 338 -1.02% -44.64%
INDIAMART 54,150 6,297.30 -0.87% -44.60%
NATIONALUM 1,88,19,000 97.6 -1.11% -39.52%

(Decrease in open interest as well as price)

Short-covering

Symbol Current OI CMP Price change (%) OI change (%)
BOSCHLTD 33,900 16,900 1.13% -77.88%
ATUL 9,450 8,975.10 0.80% -76.19%
TORNTPOWER 8,76,000 545 0.75% -62.16%
ASTRAL 99,000 2,286.95 0.22% -46.67%
POWERGRID 57,43,641 204.45 0.05% -41.88%

(Decrease in open interest and increase in price)

Short build-up

Symbol Current OI CMP Price change (%) OI change (%)
SHREECEM 43,700 26,358 -0.87% 61.90%
INDIGO 7,11,000 1,971.35 -1.73% 59.92%
ULTRACEMCO 3,37,000 7,397.05 -0.31% 55.79%
BHARATFORG 23,47,500 694 -1.03% 46.45%
MUTHOOTFIN 6,87,000 1,478 -1.24% 46.29%

(Increase in open interest and decrease in price)

Volatility gauge

NSE’s India VIX index — which gauges the expectation of volatility in the market — eased 2.1 percent to settle at 16.2 on Friday. 



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