Indian equity benchmarks ended a choppy session on Friday with mild gains, as buying in financial, IT and oil & gas shares was countered by selling in auto and pharma stocks.

The Nifty Bank gained 0.7 percent, finishing the week 6.4 percent higher — its biggest weekly gain since May 2021.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a small body positive candle on the daily chart with upper and lower shadows, suggesting a high wave type pattern which reflects volatility, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. 

“On the weekly chart, the index has formed a long bull candle with negation of a bearish weekly pattern of lower highs and lower lows. This is a positive sign,” he said.

All hunky-dory above 17,700

The Nifty is comfortably trading above the 50-day simple moving average, which is broadly positive, said Amol Athawale, Deputy Vice President-Technical Research at Kotak Securities.

As long as it is trading above 17,700, the uptrend formation may continue up to 17,920-18,000 levels, and any further upside may take it to 18,100-18,175 levels, he said. However, Athawale also said the possibility of a quick correction up to 17,600-17,525 is not ruled out if the Nifty50 closes below 17,700.

Here are key things to know about the market before the January 10 session:

Global markets

Wall Street indices moved largely lower on Friday after the release of payroll data, which showed US employment rose by a less-than-expected amount last month. The S&P 500 fell 0.4 percent and the Nasdaq Composite one percent. The Dow Jones ended flat.

Earlier in the day, European shares slipped amid concerns about the Omicron variant of COVID-19 persisted among investors. The pan-European Stoxx 600 index fell 0.4 percent.

What to expect on Dalal Street

HDFC Securities’ Shetti believes the short-term trend of the Nifty50 remains positive. “The uptrend strength remains intact and we are unlikely to see any sharp decline… Any weakness from here could be a buying opportunity around the crucial support of 17,600… Immediate resistance is placed at 17,900,” he said.

The Nifty appears to be forming a symmetrical triangle pattern on the daily timeframe, according to independent technical analyst Manish Shah.

“The undertone of the market is bullish and the current pause is a regular feature… The index needs to trade above resistance at 17,950 for the rally to continue and this could lead to a surge to major resistance at 18,250-18,300 levels,” said Shah, who remains bullish on the market as long as the Nifty holds the support level of 17,600. 

Key levels to watch out for

Nifty50: The 50-scrip index has immediate support at 17,500 and resistance at 18,000, according to Mohit Nigam, Head-PMS at Hem Securities.

Bank Nifty: For the banking index, he sees support at 37,000 and resistance at 38,200.

Foreign institutional investors (FIIs) net purchased Indian equities worth Rs 496.3 crore on Friday. However, net sales by domestic institutional investors stood at Rs 115.7 crore, according to provisional exchange data.

December was a third straight month of FII outflows for Indian equities.

Exchange data shows the maximum call open interest is accumulated at the strike price of 18,000, with 91,700 contracts, and the next highest at 18,500, with some 70,400 contracts. On the other hand, the maximum put open interest is placed at 17,500, with 83,000 contracts.

This suggests immediate resistance at 18,000, followed by another major hurdle at 18,500, and support only at 17,500.

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 (%)
Tata Power 11,42,77,500 230.2 0.24% 10.12%
ONGC 3,88,54,200 230.2 3.84% 10.85%
India Cement 1,42,01,300 240.6 15.12% 26.87%
Delta Corp 1,99,50,200 276.3 1.08% 12.99%
Wipro 2,65,80,000 709.95 0.21% 5.44%

Long unwinding

Symbol Current OI CMP Price change (%) OI change (%)
GMR Infra 8,32,50,000 45.8 -5.47% -36.58%
Vodafone Idea 80,70,30,000 15.15 -1.62% -0.66%
RBL Bank 4,10,52,400 135 -1.14% -4.36%
Canara Bank 4,84,97,400 212.5 -0.16% -3.60%
SAIL 14,83,18,750 112.3 -0.35% -0.91%

(Decrease in open interest as well as price)

Short-covering

Symbol Current OI CMP Price change (%) OI change (%)
Federal Bank 8,92,60,000 91.6 1.27% -3.53%
Bank of Baroda 14,09,03,100 87.7 0.80% -1.52%
ICICI Bank 7,11,53,500 795.35 0.91% -2.70%
NTPC 4,45,79,700 131.4 0.57% -2.74%

(Increase in price and decrease in open interest)

Short build-up

Symbol Current OI CMP Price change (%) OI change (%)
IDFC First Bank 14,53,21,200 49.45 -1.10% 1.80%
HDFC 1,49,47,200 2,610.00 -0.81% 7.28%
Hindustan Copper 1,02,03,900 131.6 -0.53% 9.61%

(Increase in open interest and decrease in price)

52-week highs

In the BSE 500 pack, Titan, Asian Paints, Pidilite, India Cements, Page Industries, KPIT Tech, Birlasoft, Kajaria Ceramics and KPR Mill were among the 13 stocks that hit 52-week highs.

52-week lows

One stock in the broadest index on the bourse hit a 52-week low: MAS Financial Services.

Volatility gauge

NSE’s India VIX index — which gauges the expectation of volatility — eased 2.1  percent to 17.6 on Friday, having moved between 16.9 and 18.1 during the session.



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