Domestic markets came under attack from bears on Monday, snapping its gaining streak. S&P BSE Sensex shed 571 points or 0.99% to settle at 57,292 while the NSE Nifty 50 slipped 169 points or 0.98% to end at 17,117. Bank Nifty index closed 1.13% lower at 36,018. Entering the second trading session of the week, SGX Nifty was up with marginal gains suggesting a positive to flat opening bell. Global cues were mixed after US Federal Reserve Chair Jerome Powell said that the central bank was ready to raise rates faster if needed.
Global Watch: On Wall Street, Dow Jones ended 0.58% lower, followed by NASDAQ and the S&P 500. Among Asian stock markets, Shanghai Composite was in the red while Hang Seng, Nikkei 225, TOPIX, KOSPI, and KOSDAQ were up with gains.
Technical take: While registering losses on Monday, the Nifty 50 formed a long negative candle on the daily chart, that has marginally engulfed the previous positive candle. “Technically, this indicates a formation of bearish engulfing type candle pattern at the highs (not a classical one). Normally, such bearish pattern formations after a reasonable up-moves could signal impending trend reversal on the downside,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Levels to watch out for: Although Nifty 50 slipped on Monday, the medium-term texture is still seen to be positive. “We are of the view that 50-days SMA or 17250 on the Nifty would act as an immediate hurdle for the bulls. Below which the correction wave is likely to continue till 17000-16975. Fresh up-trend possible only after 17250 breakout. Above which the chances of hitting 17350-17400 would turn bright,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. Nagaraj Shetti sees Nifty support at 17000, with possibility of a bounce near these levels.
FII and DII trades: Foreign Institutional Investors (FII) turned net sellers once again on Monday, pulling out Rs 2,962 crore from domestic equities. Domestic Institutional Investors (DII) were net buyers, pumping in Rs 252 crore.
Call and Put OI: Maximum Call Open Interest (OI) is placed at 18000 strike for the March F&O series. Put OI is the most at 16000 strike. “Huge writing was seen 17500 Calls on Nifty and 39,500 calls on Bank Nifty,” said Rahul Sharma, Director & Head – Research, JM Financial. He added that Nifty and Bank Nifty futures OI remained flat, while volumed were lower than seen on Thursday.
