Nifty needs to breach 17500 for bulls to rally; 5 things to know before opening bell

Domestic headline indices enter the fresh week of trade on the back of gains. Dalal Street saw a volatile few days last week but managed to register gains over the five trading sessions. S&P BSE Sensex gained 89 points or 0.2 per cent to settle at 58,388, while the NSE Nifty 50 ended at 17,398, up 15.50 points or 0.1 per cent. The volatility index ended just below 19 levels after having soared past 21 levels earlier in the week. Entering the fresh week, SGX Nifty was down in the red, suggesting some weakness ahead of the opening bell. Global cues were mixed after Wall Street indices closed mixed on Friday.

Global Watch: On Wall Street, Dow Jones ended higher on Friday while NASDAQ and S&P 500 closed with losses. Asian stock markets were also mixed with Shanghai Composite, Hang Seng, and Nikkei 225 up in the green while KOSPI, KOSDAQ, and TOPIX were down in the red. 

What do the charts say: The Nifty 50 index formed a small negative candle on the daily chart with minor upper and lower shadow, which indicates a range-bound action in the market, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Technically, this pattern signals high wave type formation and such a pattern at range movements show less predictive value,” he added.

Levels to watch out for: Ruchit Jain, Lead Research, 5paisa.com believes the short-term trend for Nifty still remains positive as there’s no confirmation of reversal yet while adding that support is placed at 17160. “On the other hand, 17500 is the immediate resistance and if the index moves above that, it will result in a continuation of the uptrend and it can then move towards the 78.6 per cent of the entire correction which is around 17870. Traders are advised to keep a close tab on the above-mentioned levels and then trade in the direction of the breakout,” he added. Meanwhile, Nagaraj Shetti said the market may remain muted until it crosses 17500. “A sustainable move above 17500 could open the next upside targets of 17800-17900 levels in the near term. Immediate support is placed at 17200 levels,” he added.

Also Read: India Inc ready to embrace broader, new-age FTAs

FII and DII trades: Foreign Institutional Investors (FII) have now been net buyers of domestic stocks for 7 consecutive days. FIIs pumped in Rs 1,605 crore into domestic stocks on Friday. Domestic Institutional Investors (DII) have been net sellers for 3 days straight. On Friday, DIIs sold stocks worth Rs 495 crore.

Call and Put OI: For the August series, Call open interest (OI) is the most at 18000 strike, followed by 17500 strike. Put OI is the most at 16500 strike, followed closely by 16000 strike.