As Nifty50 drops key support, more chart weakness

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Trade setup for Tuesday, September 27: The Nifty50 has slipped nearly 4% below its 200-day moving average and the weakness may persist for the next 1-2 sessions, experts say. Here’s what the technical charts suggest.

Benchmark Indian equities fell to two-month closing lows on Monday as the market continued to slide for the fourth consecutive session, tracking weakness in global markets amid lingering concerns over a slowing global economy. growth and the sharp interest rate hikes of the COVID era.

What do the graphs suggest for Dalal Street?

The Nifty50 formed a long bear candle on the daily chart with a lower open, suggesting a downtrend in the market, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

Although the 50-certificate index has lost almost 1,000 points from the 18,000 mark, there is no buy confirmation coming out of the lows, he said.

He sees the possibility of a bounce from the crucial support at 16,800 in the near term.

It’s time to sell the rise in the banking sector

After facing extreme selling pressure from higher levels following Fed announcements, Nifty Bank breached crucial support at 40,000 on a closing basis, according to Kunal Shah, senior technical analyst at LKP Securities. .

“This confirms the breakdown… The index remains in a sell-up mode with a hurdle at 40,500 and next visible support at 39,000,” he said.

Here are the key things to know about the market ahead of the September 27 session:

Clever SGX

On Tuesday, Singapore Stock Exchange (SGX) Nifty futures – an early indicator of the Nifty index – rose 79.5 points or 0.5% to 17,021 ahead of the Dalal Street opening bell.

Equities in other Asian markets saw mixed moves on Tuesday as investors shrugged off the Fed’s third straight 75 basis point hike in policy rates last week, but worries persisted about the strength of the global economy. MSCI’s broadest index of Asia-Pacific stocks outside of Japan was down 0.2% at last count.

Japan’s Nikkei 225 rose 0.8%, China’s Shanghai Composite was flat and Hong Kong’s Hang Seng fell 1%.

S&P 500 futures rose 0.7%. On Monday, Wall Street’s three major indexes fell 0.6-1.1% as the Dow Jones confirmed a bear market as investors feared the Fed’s aggressive inflation campaign could send the US economy into a tailspin. a marked slowdown.

What to expect on Dalal Street?

HDFC Securities’ Shetti believes Nifty’s short-term trend continues to be strongly negative.

“The weakness can be expected to continue over the next 1-2 sessions. The lower level of 16,800 should offer a base for the market in the near term,” he said.

Mohit Nigam, Head-PMS at Hem Securities, identified the following levels to watch:

Index Support Resistance
Nifty50 16,800 17,400
Clever bank 38,000 39,500

Major Moving Averages

In a bearish signal, the Nifty slipped 3.6% below its long-term simple moving average.

Period (Nb of sessions) ADM
5 17,064.5
ten 17 118
20 17,320.1
50 17,551.3
100 17,729.3
200 17,656.4

FII/DII activity

Foreign institutional investors (FIIs) remained net sellers of Indian stocks for a fourth consecutive trading day on Monday, drawing 5,101.3 crore from Dalal Street, according to preliminary exchange data. Domestic institutional investors, however, made net purchases of Rs 3,532.2 crore.

The maximum call open interest is accrued at the strike price of 17,500, with 1.7 lakh contracts, and the next highest at 17,700, with 1.4 lakh, according to exchange data. On the other hand, the maximum open interest to sell is 16,000, with 1.4 lakh contracts, and 17,000, with 1.3 lakh.

This indicates a strong hurdle at 17,500 and an immediate base at 17,000.

Here are two stocks that have seen an increase in open interest as well as price:

Store Current IO CPM Price change Change of OI
CIPLA 7,677,150 1,064.80 0.19% 14.04%
ASIAN PAINTING 4,893,000 3,440 1.06% 0.32%

Long relaxation

Store Current IO CPM Price change Change of IO
RBLBANK 47,550,000 112.35 -8.62% -27.74%
FSL 15,392,000 103.85 -0.81% -24.39%
GUJGASLTD 5,737,500 484.7 -0.51% -22.92%
M&MFIN 21,104,000 180.65 -7.43% -20.13%
NAVIGATE 77,574,000 74.4 -4.68% -19.96%

(Increase in price and decrease in open interest)

Store Current IO CPM Price change Change of IO
LTTS 893,000 3,440.15 0.89% -22.06%
IPCALAB 1,142,700 893.9 2.09% -20.14%
PERSISTENT 583,500 3,175 0.64% -17.46%
METROPOLIS 804,000 1,505.25 3.27% -16.46%
LUPINE 7,112,800 652.8 0.53% -14.62%

(Increase in price and decrease in open interest)

Store Current IO CPM Price change Change of IO
PIIND 1,696,000 3,012.50 -1.66% 32.10%
ELECTRICAL NETWORK 37,662,300 200.65 -1.21% 23.10%
BHEL 99,246,000 54.85 -5.59% 12.27%
NAUKRI 1,671,750 3,721.80 -4.41% 9.78%
POLYCAB 638,700 2,457.35 -4.09% 9.49%

(Decrease in price and increase in open interest)

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