Can the Nifty50 overcome the HDFC Bank and Infosys shockers on April 19?

  • April 19, 2022, 11:26 a.m.

Indian equity benchmarks continued to fall for the fourth back-to-back session on Monday, dragged by heavyweights such as Infosys and HDFC Bank. Both companies reported their financial results for the January-March period during the long weekend.

Mindtree shares fell tracking losses in the overall IT basket, ahead of a strong set of earnings by the company. (Check out key factors to track this week)

The question is: Can Mindtree results bring some cheer to the market on Tuesday?

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a small negative candle on the daily chart with a long lower shadow following gap-down opening, suggesting a bullish hammer type pattern, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

"This candle pattern brings hopes for the bulls to make a comeback from the lows. A sustainable upmove above 17,240 could confirm a reversal pattern," he said. 

It's bulls vs bears for now

Technically, the 50-scrip index's doji candlestick pattern suggests indecisiveness between the bulls and the bears, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities

"The larger texture is still on the bearish side and a fresh pullback rally is possible only after 17,200, above which, a pullback rally is likely to continue till 17,300-17,375 levels. On the other hand, traders can expect immediate support at the 200-day simple moving average, below which, the index could retest 17,000-16,900 levels," he said. 

Here are key things to know about the market before the April 19 session:

SGX Nifty

At 7:42 am on Tuesday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were up 41.5 points or 0.2 percent at 17,267.5, suggesting a higher opening ahead.

Global markets

Equities in other Asian markets were a mixed bag in early hours following a sluggish session on Wall Street overnight. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.6 percent at the last count.

Japan's Nikkei 225 was up 0.2 percent, South Korea's KOSPI 0.9 percent and Singapore's Straits Times 0.7 percent. On the other hand, Hong Kong's Hang Seng tumbled 2.7 percent and China's Shanghai Composite was flat.

S&P 500 futures were up 0.2 percent.

On Monday, the three main US indices ended a choppy session up to 0.1 percent lower as investors contrasted Bank of America's positive earnings with surging bond yields.

What to expect on Dalal Street

HDFC Securities' Shetti continues to hold the view the Nifty is in a short-term negative trend.

"The overall chart pattern indicates the possibility of a bounce from the current level or from near 17,000. The confirmation of a reversal pattern and the strength of upside bounce is likely to open up a relief rally for the market," he said. 

Levels to watch out for

Period (No. of days)

Simple moving average
5 17,527.8
10 17,676.7
20 17,481
50 17,157.4
100 17,293.8
200 17,164.7

Sumeet Bagadia, Executive Director at Choice Broking, pointed out the following levels: 

Index Support Resistance
Nifty50 17,000 17,370
Nifty Bank 36,200 37,400

FII/DII activity

Foreign institutional investors (FII) net sold Indian shares worth Rs 6,387.5 crore on Monday -- the biggest single-day outflow since March 8 -- though domestic institutional investors (DIIs) made net purchases of Rs 3,342 crore, according to provisional exchange data. 

Call/put open interest

The maximum call open interest is accumulated at the strike price of 18,000, with 1.5 lakh contracts, and the next highest at 17,400 and 17,500, with 1.1 lakh each, according to exchange data. Also, the maximum put open interest is at 17,000, with more than 70,000 contracts, and the next highest at 16,500, with nearly 68,000.

This suggests immediate resistance in the 17,400-17,500 band followed by a major hurdle at 18,000, and meaningful support only at 17,000 followed by a cushion at 16,500.

Long build-up

Here are five stocks that saw an increase in open interest as well as price:

Symbol Current OI CMP Price change (%) OI change (%)
NTPC 6,73,56,900 163.55 5.86% 42.02%
CHAMBLFERT 25,86,000 511.2 7.26% 29.00%
COROMANDEL 11,21,250 858 2.01% 20.90%
ICICIPRULI 54,51,000 543.35 0.63% 16.22%
TORNTPOWER 28,24,500 565.15 2.89% 12.53%

Long unwinding

Symbol Current OI CMP Price change (%) OI change (%)
PVR 28,13,591 1,826.90 -4.40% -6.68%
RAMCOCEM 27,05,550 806.35 -0.85% -2.80%
APOLLOTYRE 1,39,25,000 191.1 -2.45% -2.60%
INDHOTEL 2,32,39,116 247 -2.45% -2.41%
INDUSTOWER 1,69,26,000 216.45 -0.18% -2.32%

(Decrease in open interest as well as price)

Short-covering

Symbol Current OI CMP Price change (%) OI change (%)
HONAUT 6,345 40,399.60 1.04% -3.78%
RBLBANK 4,60,14,300 131.6 0.27% -3.58%
CIPLA 82,22,500 1,034 1.33% -2.28%
TITAN 59,80,875 2,505 1.40% -1.85%
PIDILITIND 29,92,000 2,371.70 0.07% -1.44%

(Increase in price and decrease in open interest)

Short build-up

Symbol Current OI CMP Price change (%) OI change (%)
MINDTREE 24,21,800 3,975.05 -3.44% 18.60%
TATAPOWER 9,62,82,000 258.5 -5.66% 14.86%
PERSISTENT 3,94,500 4,241.80 -2.41% 14.26%
LTI 12,45,450 5,912 -2.28% 13.02%
UBL 9,94,000 1,516.65 -1.08% 11.16%

52-week highs

A total of 20 stocks on the BSE 500 -- the broadest index on the bourse -- hit 52-week highs:

ADANIGREEN CREDITACC JKPAPER RHIM
BDL DEEPAKFERT MAZDOCK SCHAEFFLER
BEL GHCL MINDACORP SWANENERGY
CGCL HAL NTPC VBL
CHAMBLFERT IIFL RCF WELCORP

52 week lows

No BSE 500 stock hit a 52-week low.

Fear gauge

The India VIX -- known in market parlance as the fear gauge -- rose 8.7 percent to settle at 19.3 on Monday, having risen to a more than two-week high of 20.5 during the session. In late February, Russia's move to invade Ukraine had sent the VIX soaring to almost 34.

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

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