Nifty 50 needs to hold 16400 for bulls to gain control; 5 things to know before today’s opening bell

Entering Tuesday’s trade, SGX Nifty was in the red, down more than 100 points, hinting at a continuation of yesterday’s downward trend.

Nifty today
Global cues were mixed on Tuesday morning. (Image: REUTERS)

Domestic stock markets have started the week on a negative note with both the headline indices closing with losses on Monday. S&P BSE Sensex fell 93 points or 0.17% to settle at 55,675 while the NSE Nifty 50 index slipped 0.09% to end the day at 16,569. India VIX, the volatility gauge has regained 20 levels, gaining 1% on Monday. Entering Tuesday’s trade, SGX Nifty was in the red, down more than 100 points, hinting at a continuation of yesterday’s downward trend. Global cues, however, are largely positive after Wall Street zoomed overnight. 

Global watch: Wall Street saw the NASDAQ index rise 0.40% on Monday, followed by a 0.31% jump in the S&P 500. Dow Jones closed flat with a positive bias. Asian markets seemed to be mirroring the move with Shanghai Composite, Nikkei 225, and TOPIX in the green. KOSPI, KOSDAQ, and Hang Seng were down in red.

What do the charts say: With the Nifty ending with marginal losses on Monday, the index formed a small positive candle on the daily chart with minor upper and lower shadow, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Normally, a formation of such patterns after a reasonable up-move or down moves calls for reversal on either side. But, having formed this pattern amidst a range movement, the predictive value could be less,” he added.

Levels to watch out for: “Nifty has repeatedly taken support at the 16,440 area which means if this level breaks we can see a quick dip down to 16,300 ahead of the RBI policy,” said Rahul Sharma, Director and Head – Technical, JM Financial. He added that positional traders can utilise dips as buying opportunities until the index closes below 16,300. Meanwhile, Nagaraj Shetti said that as long as the area of 16,400 level is protected, there is a possibility of an upside bounce in the market.

FII and DII trades: Foreign Institutional Investors (FII) continued to be net sellers of domestic stocks on Monday. FIIs pulled out Rs 2,397 crore from domestic stocks. Domestic Institutional Investors (DII) were net buyers. DIIs pumped in Rs 1,940 crore into Dalal Street. 

Call and Put OI: Retail positions in index futures increased to the highest since May 19 while FIIs sold index options worth Rs 2,870 crore, said Rahul Sharma. “Nifty futures saw build-up of long positions as COI was up by 8.8%. Options concentration is seen at 16,300 Puts and 16,80 Calls,” he added.

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