Domestic stock markets started the week’s trade down in the red, falling more than 1% on Monday. S&P BSE Sensex is currently trading at 56,579 points while the NSE Nifty 50 index settled at 16,953. Bank Nifty, however, closed with marginal gains. India VIX, skyrocketed to breach 21 levels. Ahead of Tuesday’s trade, SGX Nifty was up in the green, suggesting a pullback on domestic markets after yesterday’s heavy loss. Global markets were largely positive after Wall Street equity indices ended with gains on Monday. Chartists say that the Nifty 50 is placed near crucial support levels.
Global watch: On Monday, NASDAQ rose 1.3%, followed by the Dow Jones and S&P 500. Among Asian stock markets, Hang Seng, TOPIX, Nikkei 225, KOSPI, and KOSDAQ were trading with gains. Shanghai Composite was down with losses.
What do the charts say: On Monday, the Nifty 50 formed a small negative candle on the daily chart with minor upper and lower shadow, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Technically, this pattern signals a formation of high wave-type candle pattern, which indicates high volatility in the market. Normally such formations after a reasonable decline or near the crucial supports more often act as a reversal pattern,” he added.
Levels to watch out for: On the charts, the Nifty 50 has strong support around 16800 levels, said Nagaraj Shetti. He is expecting an upside bounce from the lows in the next 1-2 sessions. Meanwhile, Ruchit Jain, Lead Research, 5paisa.com said that 16825 is an important support and if this support is breached, then the index could correct further towards 16400. “On the flipside, if the strength in the banks continues and the Nifty does not break this support, then a pullback move towards 17100-17150 could be seen,” he added.
FII and DII trades: Foreign Institutional Investors (FII) continued to be net sellers of domestic stocks on Monday. FIIs pulled out Rs 3,302 crore from the markets. On the other hand, Domestic Institutional Investors (DII) were net buyers, pumping in Rs 1,870 crore.
Call and Put OI: For the April futures & options series, maximum call Open Interest (OI) is placed at 17800 strike, followed by 17500. Meanwhile, Put OI is the most at 16000 strike, followed by 17000.