After falling for two consecutive trading sessions, domestic equity markets could appear to reverse the trend on Tuesday. S&P BSE Sensex at present sits at 48,564 points although the 50-stock NSE Nifty was at 14,281. On Tuesday morning, SGX Nifty was up 89 points, hinting at a positive start off for the day’s trade on Dalal Street. Although Wall Street was closed on Monday for trading, cues from Asian peers had been mixed. Shanghai Composite was down .25% but Hang Seng was up more than 1%. Nikkei 225 and TOPIX as well had been up with gains, followed by KOSPI and KOSDAQ.
What do the charts say: Nifty has carried on with a adverse bias for two consecutive trading sessions now. The weakness took the index under the help levels of 14,350. “A long negative candle was formed on the daily chart with a minor lower shadow. Monday’s weakness has turned out to be a back to back decline in the market for the two consecutive sessions. This follow-through weakness pattern has been formed for first time on Monday, nearly after two months (as per daily chart). Hence, one needs to be cautious about crucial trend reversal in the market,” mentioned Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Levels to watch out: Some technical analysts think the trend may well have reversed with the consecutive fall in the Nifty. “As the market closed below the crucial support 14350/48800, Nifty could fall to 14100/48100 or 14000/47900 in next couple of days. On the higher side, 14350/48800 and 14460/49150 would be major hurdles,” mentioned Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities. He advises to trade on bounces and maintaining a quit-loss.
FII and DII activity: Despite the weakness, Foreign Institutional Investors (FII) have not stopped purchasing domestic securities. FIIs pumped in Rs 650 crore into domestic stock on Monday morning. They had been also net purchasers of Index Options and Stock Futures. Domestic Institutional Investors (DII) had been once again net sellers on Monday, pulling away Rs 42.51 crore.
Call and Put Option information: For the January series, maximum Call Open Interest (OI) is nevertheless placed at 15,000 strike with 24,93 lakh contracts. This is followed by 19.98 lakh contracts at 14,500 strike. However, enormous Call writing was noticed at 14,500 and 14,400 and Call unwinding was at levels greater than 15,000. Put OI is the most at 14,000 strike with 31.32 lakh contracts, followed by 13,000 strike with 24.28 lakh contracts.
Results today: Today on Dalal Street, L&T Infotech, CEAT, CSB Bank, Bank of Maharashtra, Tata Communications, Hatsun Agro Products, Network18 Media & Investments, ICICI Lombard General Insurance Company, and Tata Metaliks will be amongst the firm that will report their quarterly efficiency.