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Trade setup for Jan 10: Is there more upside left in Nifty50? Check out key market cues before Monday’s sessio – CNBCTV18

Indian equity benchmarks ended a choppy session on Friday with mild gains, as buying in financial, IT and oil & gas shares was countered by selling in auto and pharma stocks.

The Nifty Bank gained 0.7 percent, finishing the week 6.4 percent higher — its biggest weekly gain since May 2021.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a small body positive candle on the daily chart with upper and lower shadows, suggesting a high wave type pattern which reflects volatility, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. 

“On the weekly chart, the index has formed a long bull candle with negation of a bearish weekly pattern of lower highs and lower lows. This is a positive sign,” he said.

All hunky-dory above 17,700

The Nifty is comfortably trading above the 50-day simple moving average, which is broadly positive, said Amol Athawale, Deputy Vice President-Technical Research at Kotak Securities.

As long as it is trading above 17,700, the uptrend formation may continue up to 17,920-18,000 levels, and any further upside may take it to 18,100-18,175 levels, he said. However, Athawale also said the possibility of a quick correction up to 17,600-17,525 is not ruled out if the Nifty50 closes below 17,700.

Here are key things to know about the market before the January 10 session:

SGX Nifty

At 7:43 am on Monday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — were up 86.5 points or half a percent at 17,943.5, suggesting a positive opening ahead on Dalal Street.

Global markets

Equities in other Asian markets were mixed on Monday as investors count down to another US inflation reading that could well set the seal on an early rate hike from the Federal Reserve. MSCI’s broadest index of Asia Pacific shares outside Japan was up 0.2 percent at the last count. Hong Kong’s Hang Seng was up 0.3 percent and Singapore’s Straits Times up 1.1 percent, but China’s Shanghai Composite down 0.3 percent and South Korea’s KOSPI down 1.1 percent.

S&P 500 futures were flat in Asia.

On Friday, Wall Street’s main indices moved largely lower after the release of payroll data, which showed US employment rose by a less-than-expected amount last month. The S&P 500 fell 0.4 percent and the Nasdaq Composite one percent. The Dow Jones ended flat.

What to expect on Dalal Street

HDFC Securities’ Shetti believes the short-term trend of the Nifty50 remains positive. “The uptrend strength remains intact and we are unlikely to see any sharp decline… Any weakness from here could be a buying opportunity around the crucial support of 17,600… Immediate resistance is placed at 17,900,” he said.

The Nifty appears to be forming a symmetrical triangle pattern on the daily timeframe, according to independent technical analyst Manish Shah.

“The undertone of the market is bullish and the current pause is a regular feature… The index needs to trade above resistance at 17,950 for the rally to continue and this could lead to a surge to major resistance at 18,250-18,300 levels,” said Shah, who remains bullish on the market as long as the Nifty holds the support level of 17,600. 

Key levels to watch out for

Nifty50: The 50-scrip index has immediate support at 17,500 and resistance at 18,000, according to Mohit Nigam, Head-PMS at Hem Securities.

Bank Nifty: For the banking index, he sees support at 37,000 and resistance at 38,200.

FII/DII activity

Foreign institutional investors (FIIs) net purchased Indian equities worth Rs 496.3 crore on Friday. However, net sales by domestic institutional investors stood at Rs 115.7 crore, according to provisional exchange data.

December was a third straight month of FII outflows for Indian equities.

Call/put open interest

Exchange data shows the maximum call open interest is accumulated at the strike price of 18,000, with 91,700 contracts, and the next highest at 18,500, with some 70,400 contracts. On the other hand, the maximum put open interest is placed at 17,500, with 83,000 contracts.

This suggests immediate resistance at 18,000, followed by another major hurdle at 18,500, and support only at 17,500.

Long build-up

Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:

SymbolCurrent OICMPPrice change (%)OI change (%)
Tata Power11,42,77,500230.20.24%10.12%
India Cement1,42,01,300240.615.12%26.87%
Delta Corp1,99,50,200276.31.08%12.99%

Long unwinding

SymbolCurrent OICMPPrice change (%)OI change (%)
GMR Infra8,32,50,00045.8-5.47%-36.58%
Vodafone Idea80,70,30,00015.15-1.62%-0.66%
RBL Bank4,10,52,400135-1.14%-4.36%
Canara Bank4,84,97,400212.5-0.16%-3.60%

(Decrease in open interest as well as price)


SymbolCurrent OICMPPrice change (%)OI change (%)
Federal Bank8,92,60,00091.61.27%-3.53%
Bank of Baroda14,09,03,10087.70.80%-1.52%
ICICI Bank7,11,53,500795.350.91%-2.70%

(Increase in price and decrease in open interest)

Short build-up

SymbolCurrent OICMPPrice change (%)OI change (%)
IDFC First Bank14,53,21,20049.45-1.10%1.80%
Hindustan Copper1,02,03,900131.6-0.53%9.61%

(Increase in open interest and decrease in price)

52-week highs

In the BSE 500 pack, Titan, Asian Paints, Pidilite, India Cements, Page Industries, KPIT Tech, Birlasoft, Kajaria Ceramics and KPR Mill were among the 13 stocks that hit 52-week highs.

52-week lows

One stock in the broadest index on the bourse hit a 52-week low: MAS Financial Services.

Volatility gauge

NSE’s India VIX index — which gauges the expectation of volatility — eased 2.1  percent to 17.6 on Friday, having moved between 16.9 and 18.1 during the session.