Bulls May Help Nifty50 Hit 17,900 Soon


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Trade setup for Tuesday, August 16: The Nifty50 is heading for key resistance at the 17,800-17,900 levels, but volatility may persist, experts say. Here is what the technical charts suggest:

India’s equity benchmarks hit fresh four-month closing highs on Friday as Dalal Street headed into a long weekend amid gains in financials, metals and oil and gas stocks, although losses in IT stocks limited the upside.

What do the graphs suggest for Dalal Street?

The Nifty50 has formed a small positive candle on the daily chart with minor upper and lower shadows, according to Nagaraj Shetti, technical research analyst at HDFC Securities.

He believes the index is gradually moving towards the 17,800-17,900 levels, but warns volatility could persist.

Nifty Bank heads to the top

“Nifty Bank’s next resistance is at the 39,500 index, a move above that will lead to levels towards the 40,000 mark…Immediate support stands at 38,000,” said Kunal Shah, Principal Technical Analyst at LKP Securities.

He suggests investors adopt a buy-on-dip approach.

Here are the key things to know about the market ahead of the August 16 session:

Wall Street indices fell on Monday, mirroring global markets, after weak economic data out of China rekindled fears of an economic slowdown in the world’s second-largest economy. The The S&P 500 and Dow Jones were down 0.4% at last count, and the Nasdaq Composite was down 0.1 percent.

European stocks managed to edge closer to two-month highs as investors turned to defensive sectors such as healthcare and consumer staples. The pan-European Stoxx 600 rose 0.2%.

What to expect in Dalal Street

HDFC Securities’ Shetti believes the short-term trend of the 50-stock index remains positive with limited action.

“We can expect a continuation of a choppy move at the start of this week… The Nifty could eventually reach around 17,800-17,900 levels… Bulls should be cautious and protect their longs with appropriate stop losses,” did he declare.

Main levels to monitor

Both the Nifty50 and the Nifty Bank are around 6% above their long-term simple moving averages in a bullish sign.

Period (Nb of sessions) ADM
Nifty50 Clever bank
5 17,696.2

39,024.4

ten 17,674.9 38,942.1
20 17,642.7 38,779.2
50 17,515.8 38,319.9
100 17,251.3

37,853.3

200 16,768.8 36,704.3

Sumeet Bagadia, Executive Director at Choice Broking, identified the following resistance and support levels:

Index Support Resistance
Nifty50 17,450 18,000
Clever bank 38,000 40,000

FII/DII activity

Open call/sell interest

The maximum call open interest is accrued at the strike price of 17,800, with 1.2 lakh contracts, and the next highest at 18,000, with one lakh, according to exchange data. On the other hand, the maximum open interest to sell is 17,000, with almost 91,000 contracts, and 17,500, with more than 85,000 contracts.

This suggests strong resistance at 17,800 and major support at 17,500.

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

Store Current IO CPM Price change (%) Change in OI (%)
INDIACEM 10,628,500 193.5 0.42% 29.06%
PFCs 30,070,000 121.2 1.30% 17.75%
GSPL 3,272,500 247.6 4.65% 16.04%
TATACHEM 7,432,000 1,122.60 3.91% 14.34%
MUTHOOTFIN 4,534,125 1,192.25 1.19% 13.92%

Long relaxation

Store Current IO CPM Price change (%) Change in OI (%)
BATAINDIA 2,333,925 1,912.55 -0.42% -6.29%
ALKEM 426,800 2,953.85 -0.56% -5.90%
ATUL 111,900 9,276.15 -1.52% -5.43%
METROPOLIS 832 800 1,487.20 -0.77% -4.90%
CANBK 39,708,900 231.8 -0.11% -4.80%

(Increase in price and decrease in open interest)

Store Current IO CPM Price change (%) Change in OI (%)
EICHERMOT 3,740,450 3,206.10 1.29% -11.73%
AARTIIND 3,375,350 818 0.17% -8.84%
PELLETS 12,692,000 310.35 1.19% -8.23%
LTTS 1,079,000 3,660.95 0.22% -7.51%
GNFC 4,577,300 753.7 0.67% -7.44%

(Increase in price and decrease in open interest)

Store Current IO CPM Price change (%) Change in OI (%)
IPCALAB 813 800 919.95 -9.76% 87.94%
DIVISLAB 2,442,600 3,726.95 -5.75% 26.90%
HDFCAMC 2,537,400 1,963.75 -3.57% 11.09%
AUBANQUE 6,533,000 634 -1.42% 5.95%
TOURBILLON 452,200 1,797.45 -0.56% 5.26%

(Decrease in price and increase in open interest)

A total of 18 stocks in the BSE 500 universe – the exchange’s broadest index – hit 52-week highs.

ADANIENT ICICIBANK SCHAEFFLER
ADANITRANS INDHOTEL SIEMENS
APPLAPOLLO CSK SKFINDIA
CUMMINSIND METROMARK TATACHEM
DEVYANI PAGEIND TATAELXSI
FLUOROCHEM PHOENIXLTD TRENT

No stock in the basket of 500 scripts hit a 52-week low.


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