Charts suggest bulls in control but global cues remain weak; 5 things to know before opening bell
Domestic headline indices closed with losses on Monday, kicking off the week on a sombre note. S&P BSE Sensex slipped 86 points or 0.16% to settle at 54,395 while the NSE Nifty 50 moved 4.6 points lower to end at 16,216. Broader markets, however, outperformed the benchmarks and closed with gains. Entering the second day of trade this week, SGX Nifty was down with losses, suggesting a gap-down start for Sensex and Nifty. Global cues were also weak after Wall Street equity indices closed in the red. Asian Stock markets mirrored the fall. India VIX is still below 19 levels.
Global watch: On Wall Street, NASDAQ tanked 2.26% on Monday, followed by the S&P 500 and the Dow Jones. Among Asian stock markets, Shanghai Composite, Hang Seng, Kospi, KOSDAQ, Topix, and Nikkei 225 were all down with losses.
What do the charts say: On the daily charts, a long bull candle was formed after opening lower. “This pattern signals a consolidation in the market after a recent sharp up-move. This is a positive indication and signals a lack of selling participation in the market at the hurdle of 16,200-16,300 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Nifty’s minor weakness and range-bound action could result in formation of strong base around 16,050 levels, according to Shetti.
Levels to watch out for: “The momentum oscillator RSI maintains its bullish crossover. The short-term trend is likely to remain positive as long as it holds above 16,000,” said Rupak De, Senior Technical Analyst at LKP Securities. He added that resistance is at 16,300. Meanwhile, Nagaraj Shetti believes the short-term uptrend status of the Nifty remains intact and the market is taking a temporary halt before showing further up-move in the near term. “Hence, the current range movement within 16100-16250 levels is likely to extend for the next session. A sustainable move above 16300 could be viewed as strengthening of upside momentum,” he added.
FII and DII trades: Foreign Institutional Investors (FII) were net sellers of domestic equities for the fourth consecutive day. However, the selling has been soft at just Rs 170 crore on Monday. Domestic Institutional Investors were also net sellers, pulling out Rs 296 crore.
Call and Put OI: For the July series, Call Open Interest (OI) is the most at 17,000 strike, followed by 16,500 strike. On the other hand, Put OI is the most at 15,000 strike, followed by 15,500 and 16,000.