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Trade setup for Jan 18: Can Nifty50 take out 18,500 soon? Check out key market cues ahead of Tuesday’s session – CNBCTV18

Indian equity benchmarks ended a volatile session mildly higher on Monday as gains in auto and oil & gas shares pushed the headline indices higher, though losses in financial and pharma shares limited the upside.

The Nifty Bank slipped 0.4 percent, falling for a third straight day.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a small bullish candle, and appears to be holding a higher bottom series on the intraday charts in a largely positive sign, according to Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

“For trend-following traders, 18,225 would be the key level to watch out for, above which, the uptrend formation may continue up to 18,375-18,400 levels. However, a quick intraday correction is not ruled out if the index trades below 18,225, below which, it could even hit the 18,150-18,100 band,” he said.


Time to buy on dips

Manish Hathiramani, Proprietary Index Trader and Technical Analyst at Deen Dayal Investments, believes the Nifty should be headed to the 18,500 mark now, and advises traders against jumping into fresh long positions.

“A buy-on-dips approach is better as the risk-reward ratio is not favourable at current levels, with support at 18,100,” he said.

Here are key things to know about the market before the January 18 session:

Global markets

European share markets rose on Monday as investors focused on earnings after mixed economic data from China. The pan-Europe Stoxx 600 index was up half a percent at the last count. Federal Reserve policymakers entered a quiet period ahead of a scheduled meeting next week.

S&P 500 futures were up 0.2 percent, suggesting a positive opening ahead on Wall Street.

What to expect on Dalal Street

Rahul Sharma, Co-Founder of Equity99 Advisors, expects the market to see stock-specific movements in the coming days with action in the midcap and smallcap segments. “Overall, the market outlook appears to be positive and one should look to keep adding quality stocks in their portfolio,” he said. 

Sharma expects telecom, metal, real estate and banking stocks to be in focus on Dalal Street now.

A lot of opportunities can be seen in the market on the buy side as long as the index stays above 17,921, according to Prashant Tapse, Vice President (Research) at Mehta Equities.

“The technical landscape is still aggressively bullish. This optimistic backdrop should take the Nifty easily to its magical goalpost of 18,605 and then to aggressive targets around the psychological 19,000 mark,” he said. The Nifty scaled its current all-time high of 18,604.5 on October 19, 2021.

Key levels to watch out for

Nifty50: Strong support for the 50-scrip index is expected at 18,150 and key resistance at 18,340, according to Mohit Nigam, Head-PMS at Hem Securities.

Bank Nifty: For the banking index, he sees support at 38,100 and resistance at 38,540, he said.

FII/DII activity

Provisional exchange data shows foreign institutional investors (FIIs) net sold Indian equities worth Rs 1,598.2 crore on Friday. However, domestic institutional investors made net purchases of Rs 371.4 crore.

Call/put open interest

Exchange data shows the maximum call open interest is accumulated at the strike price of 19,000, with 1.1 lakh contracts, and the next highest at 18,400, with more than 85,400 contracts. The maximum put open interest is placed at 18,000, with one lakh contracts.

This suggests immediate resistance at 18,400 followed by a major hurdle at 19,000, and meaningful support at 18,000.

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, TCS, Infosys, L&T, Grasim, SBI Life, Adani Enterprises, Adani Green, Tata Communications, Aditya Birla Fashion, Rajesh Exports, KPR Mill, Jamna Auto and Tanla were among the 37 stocks that hit 52-week highs.

52-week lows

Two stocks in the broadest index on the bourse hit 52-week lows: Dilip Buildcon and IGL.

Volatility gauge

NSE’s India VIX index — which gauges the expectation of volatility — rose 1.3 percent to 16.8 on Monday, having surged as much as six percent during the session.