"If I have to take a view for the next 12 months, while we are positive from a long term standpoint, one should be bracing for some short term volatility, because at the margin, US Fed has been tightening, even though the pace of tightening is going to be more gradual and at the margin domestic liquidity is also moderate," he said.
What do the charts suggest for Dalal Street?
According to Nagaraj Shetti, technical research analyst at HDFC Securities, the market is forming a bullish hammer type candle pattern. Usually, such a pattern after a correction calls for caution for short positions and more often results in upside bounces from the lows.
Siddhartha Khemka of Motilal Oswal Financial Services also expects the market to consolidate for the next few days given the RBI policy on Wednesday and the Gujarat election outcome the day after. However, he expects some reaction based on the Gujarat exit-poll data that was released on Tuesday.
Here are key things to know about the market ahead of the December 6 session:
On Tuesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — declined 70 points points or 0.37 percent to 18,741, thereby pointing to a negative opening for the market.
Benchmark indices in the Asia-Pacific have opened lower, mirroring last night's sell-off on Wall Street, on fears that the US Federal Reserve will keep raising interest rates.
The Nikkei 225 in Japan and the Topix index are down 0.2 percent each while the Kospi of South Korea has shed over a percent. The Kosdaq index, the South Korean counterpart of the Nasdaq, is also trading 1.2 percent lower.
An MSCI gauge of Asia-Pacific shares ex-Japan traded with cuts of 0.5 percent.
On Wall Street, the Dow Jones fell nearly 500 points while the S&P 500 slumped nearly 2 percent, as did the Nasdaq.
What to expect on Dalal Street
According to Shetti of HDFC Securities, the Nifty 50 reversed from its immediate support of the 10-day exponential moving average and also a trendline support as per the index's daily chart. He believes that Monday's low of 18,591 will be the new "higher bottom" in the "higher top, higher bottom" sequence.
"The minor downward correction in Nifty is about complete and the market is set to show upside bounce from the lows in the short term," he said.
Key levels to watch out for
For the weekly options expiry on Thursday, December 8, the Nifty's 19,000 strike call has added 8.7 lakh shares while the 18,900 call added another 7.2 lakh shares in Open Interest.
On the down side, Open Interest addition was seen in the 18,600 put option, which added 5.4 lakh shares while the 18,500 put added close to 9 lakh shares.
FII/DII activity
He expects India to have a deep impact on either inflows or outflows of another $5 billion.
Here are five stocks that saw an increase in open interest as well as price:
Stocks | Current OI | CMP | Price Change | OI Change |
Piramal Enterprises | 59,39,175 | 912.95 | 5.32% | 12.16% |
M&M Financial | 2,03,00,000 | 243.00 | 5.72% | 11.51% |
GNFC | 74,39,900 | 602.70 | 0.27% | 10.46% |
Hindalco | 2,07,67,905 | 483.45 | 4.24% | 9.70% |
City Union Bank | 80,50,000 | 197.5 | 2.23% | 9.00% |
Short build-up (Decrease in price and increase in open interest)
Stocks | Current OI | CMP | Price Change | OI Change |
Navin Fluorine | 4,45,050 | 4,429.40 | -0.50% | 29.11% |
JK Cement | 5,38,500 | 3,215.05 | -1.35% | 5.74% |
Bajaj Finance | 59,22,875 | 6,714.00 | -0.29% | 5.70% |
Aarti Industries | 27,63,350 | 677.45 | -0.22% | 5.38% |
Biocon | 2,10,01,300 | 281.6 | -1.50% | 5.07% |
Short Covering (Increase in price and decrease in open interest)
Stocks | Current OI | CMP | Price Change | OI Change |
Info Edge | 14,45,750 | 4,086.05 | 0.25% | -6.56% |
Coal India | 2,86,69,200 | 232.90 | 1.97% | -6.53% |
HDFC | 1,51,49,400 | 2,695.00 | 0.32% | -4.87% |
United Breweries | 11,27,600 | 1,757.25 | 0.43% | -4.73% |
ICICI Bank | 6,60,64,625 | 939.5 | 0.40% | -4.48% |
Long Unwinding (Decrease In Price & Open Interest)
Stocks | Current OI | CMP | Price Change | OI Change |
Persistent Systems | 4,52,850 | 4,285.05 | -2.20% | -13.47% |
Britannia | 12,85,000 | 4,418.00 | -0.81% | -5.79% |
Nestle India | 2,72,040 | 19,895.95 | -0.11% | -5.50% |
Gujarat Gas | 48,58,750 | 510.10 | -1.84% | -5.10% |
Coforge | 5,74,650 | 4,189 | -1.30% | -4.96% |
First Published: Dec 6, 2022 6:13 AM IST