Is profit booking likely as Nifty50 extends its winning run? Main market indices ahead of Monday’s session

India’s equity benchmarks hit record highs again, with the Nifty50 index closing above the 18,300 mark for the first time. Broad-based gains led by financials, IT and metals stocks pushed the market higher on Friday. Broader markets also supported the market as a whole, although the mid and small cap indices saw smaller gains compared to the overall gauges.

What do the charts suggest for Dalal Street now?

The Nifty50 index has formed another long bullish candle on the daily chart, showing signs of strong bullish momentum, according to Nagaraj Shetti, technical research analyst at HDFC Securities.


It’s time to buy on the dips

Any dip near immediate support at 18,250 and then 18,170 is likely to be a new buying opportunity for an overall target of 18,500, said Rohit Singre, senior technical analyst at LKP Securities. He expects an immediate obstacle near the 18,400-18,500 area, where he said you can lock in long gains.

Here are the key things to know about the market ahead of Monday’s session:

Clever SGX

As of 8:09 a.m. Monday, Nifty futures traded on the Singapore Stock Exchange – a leading indicator of the Nifty Index – rose 26 points or 0.1% to 18,430, after rising 65 points earlier in the day.

Global Markets

Asian stocks fell ahead of the release of China’s quarterly GDP reading. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 0.2% and Japan’s benchmark Nikkei 225 index fell 0.3%.

S&P 500 futures were flat at the start of Asian trading, suggesting a muted start in the United States on Monday.

On Friday, Wall Street’s three major indexes rose 0.5 to 1.1% after Goldman Sachs ended a strong earnings season for big banks. A surprise jump in retail sales bolstered views on the economic recovery.

What to expect in Dalal Street

“Normally, three consecutive gaps form in a strong uptrend move before showing a downward correction from the highs. Therefore, there is a higher chance of another gap opening on Monday before any booking of profits from higher levels,” said Shetti of HDFC Securities.

He believes the index’s short-term trend remains positive, with no signs of a reversal forming at the highs, he said.

Main levels to monitor

According to Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One, the strong support of the Nifty50 index is placed at 18,200 in the next few days, followed by 18,000.

A key level for bulls is 18,000, but reveling in such levels should be avoided, Chavan said. “The pragmatic approach would be to go one step at a time and try to avoid aggressive overnight bets. Stock-specific action continues and traders are advised to continue to focus on these Paris,” he said.

Profit bookings can be expected around 18,500-18,600 this week, with immediate support at 18,265, Shetti said.

FII/DII activity

Foreign Institutional Investors (FIIs) bought Indian shares worth Rs 1,681.6 crore on Thursday, although Domestic Institutional Investors (DIIs) played spoilsport. Net sales of the DIIs amounted to Rs 1,750.6 crore, according to exchange data.

Open call/sell interest

The maximum call open interest is accrued at the strike price of 18,400, followed by 18,500. On the other hand, the maximum sell open interest is at 18,300, and then 18,200, according to the data. from NSE. This suggests that resistance can be expected at the 18,400-18,500 levels for now, and immediate support comes in at 18,300, followed by 18,200.

Long build up

Here are five stocks that have seen an increase in open interest as well as price, suggesting an accumulation of long positions:

Symbol Current IO CPM Price change (%) Change in OI (%)
JKCEMENT 68,425 3,475 3.22% 39.13%
IRCTC 21,31,350 5,504.95 11.17% 32.80%
RECLTD 2,76,78,000 165.3 2.86% 24.24%
PFCs 3,05,78,400 149.35 4.15% 21.98%
HAL 19,52,725 1,447.75 3.37% 19.56%

Long relaxation

Symbol Current IO CPM Price change (%) Change in OI (%)
INDHOTEL 1,46,64,000 229.85 -0.58% -14.41%
TATAMOTORS 8,76,94,500 497.95 -1.78% -8.30%
BHEL 11,80,62,000 74.2 -3.13% -8.10%
INDIAMART 2,85,975 9,440 -0.93% -7.42%
JUBLFOOD 19,96,500 4,433 -2.29% -6.92%

(Decrease in open interest and price)

Short cover

Symbol Current IO CPM Price change (%) Change in OI (%)
WIPRO 4,04,41,600 711.85 5.41% -17.87%
VOLTAS 21,45,500 1,323 0.86% -8.41%
MPHASE 19.97.775 3,279.15 4.35% -7.76%
COFORGE 6,87,600 5,582 4.15% -7.45%
BEAUTIFUL 2,41,64,200 210.95 0.64% -6.73%

(Decrease in open interest and increase in price)

Short setup

Symbol Current IO CPM Price change (%) Change in OI (%)
Dalbharat 4,30,500 2,074.05 -0.14% 16.61%
HCLTECH 2,01,15,200 1,244 -1.25% 11.59%
CONCOR 80,40,072 679.85 -1.41% 10.71%
LALPATHLAB 7,49,500 3,662 -1.99% 10.14%
RBLBANK 2,42,26,600 191.9 -1.18% 9.32%

(Increase in open interest and decrease in price)

52 Week Highs

SBI, HDFC Bank, ITC, Wipro, Vedanta, Hindalco, Sun Pharma, L&T, IOC, HPCL, Grasim, NTPC and Canara Bank were among 67 stocks in the BSE 500 universe that hit 52-week highs. IRCTC, Godrej Properties, DLF, Godfrey Phillips, Cyient, Divi’s, Dixon, IDBI Bank, MCX, Mindtree and Bata were also among them.

52 week lows

While no stock in the broader stock market index hit a 52-week low, Aashka Hospitals was among the few other scrips to bottom.

Volatility indicator

NSE’s India VIX index – which measures near-term volatility expectations – ended down 2.1% at 15.8 on Thursday, after falling 21.7% during the session.