Nifty50 may soon extend the slide to even lower levels


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Trade Setup for Monday, September 19: The Nifty50 needs to break out 17,820 on the upside decisively to resume its rise, experts say. Here’s what the technical charts suggest.

India’s equity benchmarks suffered heavy losses on Friday, continuing to fall for the third day in a row, led by financials, IT, oil and gas and FMCG stocks. Global jitters persisted amid fears of a slowdown, after data of the world’s largest economy has fueled fears that the Fed has little reason to ease its cycle of rate hikes.

What do the graphs suggest for Dalal Street?

The Nifty50 has formed a long bear candle on the daily chart, suggesting more pain for the bulls aheadaccording Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

We can expect the 50 script index to soon fall below the support in the 17,450-17,500 areahe said.

Banking gauge hits record highs and retreats

“While the broader structure of the benchmark remains bullish, its close below 17,600 has certainly shaken up the intermediate structure. From a price perspective, it looks like a head and shoulders pattern on the daily timeframe, which doesn’t bode well for the bulls,” Sameet said. Chavan, chief technical and derivatives analyst at Angel One, said CNBCTV18.com.

“If this pattern proves its importance, we could see a further correction towards 17,200-17,000 in the coming week, but for now we don’t want to fall into this camp. We would prefer to reassess the situation in the first half of the week,” he said.

Here are the key things to know about the market ahead of the September 19 session:

Wall Street indices fell to monthly lows on Friday amid IMF and World Bank recession warnings, ahead of a widely expected 75 basis point hike in key rates by the US central bank. The S&P 500 fell 0.7%, the Dow Jones 0.5% and the Nasdaq Composite 0.9%.

Earlier in the day, European stocks fell, mirroring the trend across much of Asia. The pan-European Stoxx 600 index ended down 1.6%, to register its worst weekly decline in three months.

What to expect on Dalal Street?

HDFC Securities’ Shetti believes that Nifty’s short-term trend has turned negative.

“The formation of a bearish candlestick pattern on the daily and weekly charts indicates further weakness for the market. Any rise from levels around 17,200 to 17,150 over the next two weeks may find resistance around of 17,700,” he said.

Major moving averages

Friday’s sell-off sent the Nifty50 falling below its six major simple moving averages.

Period (Nb of sessions) ADM
5 17,583.2
ten 17,683.2
20 17,833.9
50 17,898.6
100 17,768.9
200 17,716.6

Angel One’s Chavan sees key support for the 50 script index at 17,400, a slide below which he believes could lead to further correction.

The Nifty50 needs to cross 17,820 to “get its mojo back,” he said. Any minor bounces towards 17,650-17,750 should be used to exit longs, he suggests.

FII/DII activity

On Friday, Foreign Institutional Investors (FIIs) sold off Indian stocks for a third consecutive day.

The maximum call open interest is accrued at the strike price of 19,000, with 1.9 lakh contracts, and the next highest at 18,000, with 1.5 lakh contracts, according to data. ‘exchange. On the other hand, the maximum open interest to sell is 17,000, with more than 92,000 contracts, and 17,500, with around 81,000.

This indicates the immediate hurdle at 18,000 and a firm base after immediate support at 17,500 only at the 17,000 mark.

Here is a stock that saw an increase in open interest as well as price:

Store Current IO CPM Price change (%) Change in OI (%)
INDIACEM 13,888,100 271.75 0.70% 23.05%

Long relaxation

Store Current IO CPM Price change (%) Change in OI (%)
VEDL 33,042,900 290.45 -7.59% -18.28%
VAC 5,052,500 2,637.10 -4.32% -11.86%
COROMANDEL 1,495,900 1,016.95 -1.26% -10.76%
CGSB 49,299,250 130.8 -1.51% -9.52%
RAMCOCEM 3,421,250 763.15 -3.64% -8.87%

(Increase in price and decrease in open interest)

Store Current IO CPM Price change (%) Change in OI (%)
INDUSINDBK 21,114,900 1,225.05 2.14% -6.22%
BEAUTIFUL 78,648,600 111.65 0.50% -5.51%
CIPLA 7,549,750 1,046.80 0.95% -4.85%
MFSL 2,129,400 825 1.11% -4.67%
DELTACORP 15,817,100 224.4 1.04% -1.99%

(Increase in price and decrease in open interest)

Store Current IO CPM Price change (%) Change in OI (%)
CHOLAFINE 6,137,500 776.5 -2.47% 7.78%
MUTHOOTFIN 5,960,250 1,029.10 -2.85% 7.65%
ULTRACEMCO 2,154,200 6,513.50 -4.45% 5.55%
HONAUT 13,500 40,554.45 -3.59% 5.33%
Crompton 3,957,000 396.2 -2.39% 4.32%

(Decrease in price and increase in open interest)

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

ADANIENT CCA MAZDOCK
ADANIPORTS CEATLTD MIDHANI
ADANITRANS COCHINERY PCBL
AMBUJACEM INDHOTEL SUMICHEM
APOLLOTIRE INDIACEM THERMAX
BDL INDUSINDBK WEST LIFE

Nine stocks hit 52-week lows.

APLTD JUBLPHARMA MPHASE
BIOCON MEDPLUS SANOFI
INTELLECT METROPOLIS VOLTAS


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