Nifty50 to correct before the next move? Check major market indices ahead of Monday’s session

Indian stock indexes carried losses to a second day in a row on Friday, after the Federal Reserve’s hint of an earlier-than-expected withdrawal from its ultra-accommodative monetary policy hurt investor confidence around the world. Losses in financials and metals stocks drove the market lower, however, gains in the FMCG and Pharmaceuticals sectors limited the decline.

So what do the charts suggest for Dalal Street?

The index formed a bullish candle on the daily scale but a bearish candle similar to the shooting star pattern over the weekly period, according to Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services. Nifty50 has canceled its formation of highest highs and lows of the past five sessions, and must now continue to hold above 16,450 to extend momentum towards 16,700, with support seen at 16,200 ”, said he declared.

A major resistance to come?

“On a weekly basis, the market formed a bearish hammer pattern that would raise further concerns. Major hurdles would be at 16,535 and 16,490 this week,” said Shrikant Chouhan, executive vice president of technical research on shares at Kotak Securities.

Here are the key things to know about the market ahead of Monday’s session:

Global markets

Wall Street surged on Friday as investors looked past concerns about whether the US central bank might start tightening its loose policy sooner than expected. However, all three major indices suffered weekly losses as a massive midweek sell-off pushed them away from record highs. Earlier today, European markets made modest gains, although the pan-European STOXX 600 index recorded its worst week since February.

The focus is now on a meeting of Federal Reserve officials at the annual Jackson Hole Symposium in Wyoming, scheduled for August 26-28, for clarity on monetary policy in the world’s largest economy in the world. ‘to come up.

What to expect

“The overall market looks weak. Investors are advised to take a cautious approach and maintain a strict stop loss on their positions. After hitting new highs, the market should correct a bit before the next upside step.” , according to Rahul. Sharma, co-founder of Equity99. He expects automotive, logistics, IT and pharmaceutical scripts to be in the spotlight this week.

Key levels to watch

Nifty50: Technically, strong support for the index is at 16,400, 16,225 and 16,000 levels, and resistance at 16,600, 16,720 and 16,900, according to Sharma.

Nifty Bank: The banking index has crucial support at 34,750, which if broken could take it to 34,600-34,400 levels. On the upper side, 35,425 will act as a significant resistance, which if broken will be followed by 35,700 and 35,900 levels, he said.

FII / DII activity

On Friday, foreign institutional investors withdrew Rs 2,287.03 net from the Indian capital market, and domestic institutional investors made net purchases of Rs 119.3 crore, according to stock exchange data.

Open interest call / put

The maximum open interest is accrued at the strike price of 16,500 and then 16,600. On the other hand, there is a high degree of open interest at the strike price of 16,400 and 16,000, depending on the data from NSE. This indicates that we can expect immediate resistance at 16,500 and support at 16,400.

Long accumulation

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

symbol Current OI CMP Price change (%) Change of IO (%)
BRITISH 03.13.600 3 883 4.15% 5.72%
PHASE 7.46.850 2 881.90 1.16% 3.18%
BERGE PAINTING 41.04,100 817.35 0.36% 2.36%
ALKEM 4,54,800 3,807.55 0.23% 1.50%

Long process

symbol Current OI CMP Price change (%) Change of IO (%)
PIIND 9 40,000 3,172.10 -0.28% -24.92%
SUNPHARMA 3,49,10,400 758.45 -2.97% -22.45%
ASHOKLEY 3,58,24,500 118.6 -5.38% -19.47%
METROPOLIS 3 52 800 2,732.10 -2.25% -18.59%
JINDALSTEL 3,37,35,000 373.5 -8.47% -17.39%

(Decrease in open interest and price)

Short construction

symbol Current OI CMP Price change (%) Change of IO (%)
ASIAN PAINTING 44,36,100 3 103.85 3.18% -17.00%
HDFC BANK 1,513.40 0.03% -15.35%
MARICO 86 14,000 535.05 1.93% -13.65%
DABUR 1 12 88 750 608.7 1.78% -10.31%
PIDILITIND 25.73,000 2 253 1.04% -10.09%

(Increase in open interest and decrease in price)

Short cover

symbol Current OI CMP Price change (%) Change of IO (%)
MOTHER SUMI 202.6 -5.72% 3.05%
GODREJPROP 21.43.700 1476.35 -2.21% 3.00%

(Decrease in open interest and increase in price)

Stocks hit 52 week highs

Hindustan Unilever, Bajaj Finance, Tata Consumer, Titan, Tata Elxsi, Britannia, Nestlé, Mindtree, DMart, Fortis, Bata, Ipca Labs, Alkem, Kajaria Ceramics, Gujarat State Petronet, L&T Infotech and L&T Technology Services were among the registered actions. 52 week highs.

Stocks at 52-week low

Aurobindo Pharma, Hero MotoCorp, Biocon, Alembic Pharmaceuticals, BBTC, Ujjivan Small Finance Bank, Gulf Oil Lubricants and Ujjivan Financial Services hit 52 week lows.

Volatility gauge

The India VIX Index – which measures expectations of volatility in the market – jumped 8.60% to 14.02, having moved into a wide range of 12.35 to 14.14 on Friday.

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