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Trade Setup For Jan 14: Is Nifty About To Make A U-Turn? Check Next Key Levels, Cues Ahead Of Friday’S Session – CNBCTV18

Indian equity benchmarks extended gains to a fifth straight session on Thursday, though gains in oil & gas and metal shares were offset by losses in financial and consumer stocks.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a small candle on the daily chart with upper and lower shadows, suggesting the formation of a dragonfly doji pattern at the highs, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. 

This is a sign of the participants’ confused state of mind, he said.

A major hurdle awaits Nifty

Independent technical analyst Manish Shah advises traders to exercise caution as there could be a corrective decline in the Nifty soon. The 50-scrip index faces a major hurdle in the 18,640-18,700 zone, he said.

Shah also said a break below the support area of 18,000-18,060 will mean the market is at a tipping point. 

Here are key things to know about the market before the January 14 session:

SGX Nifty

At 7:46 am on Friday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — were down 52.5 points or 0.3 percent at 18,248, suggesting a weak opening ahead on Dalal Street.

Global markets

Equities in other Asian markets fell tracking major losses on Wall Street overnight, as investors booked profits after Federal Reserve officials talked about inflation and rate hikes. MSCI’s broadest index of Asia Pacific shares outside Japan was down 0.7 percent at the last count.

Japan’s Nikkei 225 fell 1.9 percent, China’s Shanghai Composite 0.3 percent and Hong Kong’s Hang Seng 0.6 percent.

S&P 500 futures were down 0.3 percent in Asia.

On Thursday, the S&P 500 fell 1.5 percent, the Dow Jones 0.5 percent and the technology stocks-heavy Nasdaq Composite 2.5 percent.

What to expect on Dalal Street

HDFC Securities’ Shetti believes the short-term trend of the index remains positive. The emergence of high volatility and the formation of a doji is hinting at possible consolidation or minor weakness in the coming sessions, he said.

“Any correction from the highs could find support at the uptrend line around 18,000. However, a decisive move above 18,272 is likely to negate the bearish setup for the near term,” he added.

On Friday, long traders should be cautious below 18,150 level, as the Nifty may slide to 18,055 where the market has left an exhaustion price gap, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

“If the Nifty closes below 18,000, it would fall further to 17,900 or 17,800 levels. On the upside, 18,300 and 18,350 would be the biggest hurdles,” he added.

Key levels to watch out for

Nifty50: The 50-scrip index has strong support at 18,000 and key resistance at 18,400, according to Mohit Nigam, Head-PMS at Hem securities.

Bank Nifty: For the banking index, he sees support at 38,000 and resistance at 38,800.

FII/DII activity

Provisional exchange data shows foreign institutional investors (FIIs) net sold Indian equities worth Rs 1,390.9 crore on Thursday. However, domestic institutional investors made net purchases of Rs 1,065.3 crore.

Call/put open interest

Exchange data shows the maximum call open interest is accumulated at the strike price of 18,500, with 1.5 lakh contracts, and the next highest at 18,300, with 1.1 lakh contracts. On the contrary, the maximum put open interest is at 17,700, with almost 99,500 contracts.

This suggests immediate resistance at 18,300, followed by a major hurdle at 18,500, and on the other hand, a cushion at 17,700.

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 (%)

Long unwinding

SymbolCurrent OICMPPrice change (%)OI change (%)

(Decrease in open interest as well as price)


SymbolCurrent OICMPPrice change (%)OI change (%)

(Increase in price and decrease in open interest)

Short build-up

SymbolCurrent OICMPPrice change (%)OI change (%)

(Increase in open interest and decrease in price)

52-week highs

In the BSE 500 pack, Sun Pharma, Larsen & Toubro, Adani Green, Adani Transmission, Page Industries, Pidilite, Rajesh Exports, Balrampur Chini, Chambal Fertilisers, Deepak Fertilisers and Thermax were among the 22 stocks that hit 52-week highs.

52-week lows

No stock in the broadest index on the bourse hit a 52-week low.

Volatility gauge

NSE’s India VIX index — which gauges the expectation of volatility — eased 2.8 percent to 16.7 on Thursday.