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Indian equity benchmarks finished more than one percent on Friday led by across-the-board buying, as a short-covering led move in the US the previous night sent a positive signal across global markets.

The surge came about even as red-hot US inflation cemented fears of sharp rate hikes hampering economic growth.

What do the charts suggest for Dalal Street?

The Nifty50 has formed a long negative candle on the daily chart following a gap-up opening, reflecting an unsuccessful attempt to break out of the 17,260 resistance zone, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

One can expect high volatility to continue in the market with immediate support at 16,800, he said.

Nifty Bank poised for higher levels

A sustained move above the crucial level of 39,600 for the banking index, after it reclaimed its 50-day simple moving average last week, will confirm a bullish cup and handle pattern on the hourly chart, which could power a rally towards the 40,000-40,800 band, Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One, told CNBCTV18.com.

One can expect strong support at the bullish intraday gap around the 38,700-39,000 zone, he said. "We remain upbeat and, hence, traders should use intraweek declines as a buying opportunity."

Here are key things to know about the market ahead of the October 17 session:

SGX Nifty

Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — fell as much as 165.5 points or one percent to 17,047.5 ahead of the opening bell on Dalal Street.

Global markets

Equities in other Asian markets made a weak start to the week, continuing to decline since a short covering-led upmove on Wall Street on Thursday, with MSCI's broadest index of Asia Pacific shares outside Japan trading 1.3 percent lower at the last count.

Japan's Nikkei 225 was down 1.4 percent, China's Shanghai Composite 0.2 percent and Hong Kong's Hang Seng 1.5 percent.

S&P 500 futures were up half a percent. On Friday, the S&P 500 dropped 2.4 percent, the Dow Jones 1.3 percent and the Nasdaq Composite 3.1 percent.

What to expect on Dalal Street?

HDFC Securities' Shetti is of the view that Friday's move could be followed by more upside.

"A sustainable move above 17,260 could pull the Nifty towards next important resistance at around 17,425 with immediate support around 17,100-17,050 levels," he said.

Key moving averages

The Nifty50 is more than one percent below its long-term moving average in a bearish sign.

Key levels to watch out for

The maximum call open interest is accumulated at the strike price of 18,000, with 1.3 lakh contracts, and the next highest at 17,500, with 1.1 lakh contracts, according to provisional exchange data. The maximum put open interest is placed at 16,500, with more than 67,000 contracts, and at 17,000, with around 61,000.

This suggests an immediate hurdle at 17,500, and immediate support at the 17,000 mark followed by a strong base at 16,500.

FII/DII activity

Foreign institutional investors (FIIs) remained net sellers of Indian shares for the sixth session in a row on Friday, according to provisional exchange data.

Long build-up

Here are five stocks that saw an increase in open interest as well as price:

Long unwinding

(Increase in price and decrease in open interest)

Short covering

(Increase in price and decrease in open interest)

Short build-up

(Decrease in price and increase in open interest)

52-week highs

A total of nine stocks in the BSE 500 universe — the broadest index on the bourse — reached the milestone: TVS Motor, Sun Pharma, RITES, IDFC, IDFC First, Federal Bank, KRBL, Kalyan Jewellers and Ratnamani Metals & Tubes.

52-week lows

Thirteen stocks hit 52-week lows:

First Published:Oct 16, 2022 10:11 PM IST