Can the bulls help Nifty50 hold 17,200? What technical charts suggest, key levels to follow

Indian equity benchmarks Sensex and Nifty50 ended another choppy session on Friday down slightly as investors remained concerned about the Russia-Ukraine conflict and earlier-than-expected hikes in key interest rates.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed an inverted hammer pattern on the daily chart, which often indicates a bullish reversal, according to Rupak De, Principal Technical Analyst at LKP Securities. He thinks the index trend will remain bullish in the coming days as long as it stays above 17,200.

“On the lower end, 17,200 can act as support for a falling market. On the upper end, crucial resistance is found at 17,500,” he said.

The worst is not over yet

“Until the type of war scenario does not disappear completely, uncertainty is likely to loom in markets around the world…It is advisable not to trade aggressively; traders should avoid holding overnight positions”, Sameet Chavan, chief technical and derivatives analyst at Angel One, said CNBCTV18.com.

Here are the key things to know about the market ahead of the February 21st session:

Global Markets

Wall Street indices fell on Friday as escalating tensions in Ukraine and US warnings of a possible Russian invasion prompted investors to dump risky assets. The three key indexes closed down 0.7 to 1.2%.

Earlier in the day, European equity markets weakened, with continued pressure on stocks exposed to Russia. The pan-European Stoxx 600 fell 0.8%.

What to expect in Dalal Street

The bulls need to break above the 17,450-17,500 levels with some authority to regain strength, according to Angel One’s Chavan. He sees 17,000 and 16,800 as breakthrough levels.

The Nifty’s short-term trend continues to be choppy, with immediate support at 17,150, said Nagaraj Shetti, technical research analyst at HDFC Securities. “The Nifty’s inability to hold above 17,500 could eventually lead to a downward correction, which could eventually cause it to retest the recent low of 16,840,” he added.

Levels to watch

The Nifty must give a decisive breakout on either side of the Range of 16,800 to 17,400 for clear direction, said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services. “Volatility is also expected to remain high this week given the crucial meeting between the United States and Russia. Inflation concerns, continued FII selling and monthly F&O expirations could add to volatility,” he added.

FII/DII activity

Foreign Institutional Investors (FII) sold Indian shares worth Rs

2,530 crores Fridayaccording to preliminary exchange data. However, domestic institutional investors (DII) made net purchases of Rs 1,929.1 crore.

Exchange data shows that the maximum open interest on call is accrued at the strike price of 18,000, with 1.4 lakh contracts, followed by 17,500, with 96,000. On the other hand, the maximum open interest to sell is 17,000, with contracts of 1.2 lakh.

This suggests that the Nifty has a major hurdle at 18,000 and strong support at 17,000.

Here are two stocks that have seen an increase in open interest as well as price, suggesting an accumulation of long positions:

symbol Current IO CPM Price change (%) Change in OI (%)
COALINDE 3,68,67,600 162.45 2.52% 2.31%
COROMANDEL 8,68,125 803.2 0.33% 1.08%

Long relaxation

symbol Current IO CPM Price change (%) Change in OI (%)
ADANIPORTS 5,99,76,250 729.2 -0.86% -44.70%
SUN TV 1,16,14,500 484.15 -1.98% -25.51%
NAVIGATE 12,72,09,750 96.6 -0.82% -17.72%
AUBANQUE 25,07,000 1,257 -0.64% -16.25%
MINDTREE 25,93,000 3,809 -1.22% -14.61%

(Decrease in open interest as well as price)

Short cover

symbol Current IO CPM Price change (%) Change in OI (%)
GRASIM 88,10,775 1,718.35 0.58% -19.39%
BERGEPAINT 38,39,000 738.85 1.77% -18.45%
DRREDDY 24,25,750 4,309.75 0.11% -14.16%
HDFC 1,96,76,400 2,436.95 1.14% -14.03%
ADANIENT 1,99,07,000 1,737.60 0.42% -12.02%

(Increase in price and decrease in open interest)

Short setup

symbol Current IO CPM Price change (%) Change in OI (%)
SYNGENE 7,59,900 559.95 -3.17% 4.81%
AMBUJACEM 1,36,63,500 338.85 -5.85% 4.79%
JKCEMENT 2 63 550 2,968.60 -2.13% 1.13%
INDIAMART 3,39,975 4,745.55 -1.20% 0.64%
DIXON 5 64 375 4,069.25 -3.25% 0.16%

(Increase in open interest and decrease in price)

52 Week Highs

One stock in the BSE 500 pack hit a 52-week high: Adani Green.

52 week lows

As many as 16 stocks hit 52-week lows, including Manappuram, Indigo Paints, Cadila, Nippon Life India Asset, City Union Bank, Procter & Gamble Health, Engineers India and Dilip Buildcon.

Volatility index

NSE’s India VIX index – which measures volatility expectations in the market – rose 0.7% to 22.2 on Friday, after climbing as high as 5.5% during the session .

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