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    Trade setup for Dec 13: Nifty to stay rangebound for now? What charts suggest ahead of Monday's session

    Trade setup for Dec 13: Nifty to stay rangebound for now? What charts suggest ahead of Monday's session

    Trade setup for Dec 13: Nifty to stay rangebound for now? What charts suggest ahead of Monday's session
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    By Sandeep Singh   IST (Updated)


    Trade setup for Monday, December 13: The Nifty50 has formed a small positive candle with upper and lower shadows, says Nagaraj Shetti of HDFC Securities. Here's what the technical charts suggest for the coming session on Dalal Street.

    Indian headline indices ended a choppy session flat on Friday to halt a three-day winning streak. However, the Nifty50 clocked a second straight weekly gain, led by financial, oil & gas, auto and metal shares.
    What do the charts suggest for Dalal Street now?
    The 50-scrip index has formed a small positive candle with upper and lower shadows, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. This pattern suggests the formation of a high wave type candle. he said. 
    "The Nifty showing rangebound movement at 17,550-17,600 levels could be a positive indication for the bulls to make comeback. The consolidation movement at this important hurdle could eventually result in an upside breakout of resistance in the near term," he said.


    Time to focus on stock selection
    Volatility is expected to continue this week tracking the global trend, though the fear about the Omicron variant of COVID-19 has subsided, said Ajit Mishra, VP Research at Religare Broking. Mishra expects the Nifty to face resistance around 17,600 and 17,800 levels and find support in the 17,300-17,150 zone in case of any dip. "Since we are seeing a mixed trend across sectors, focus should be on stock selection," he said.
    Here are key things to know about the market before Monday's session:
    SGX Nifty
    At 7:33 am on Monday, Singapore Exchange (SGX) Nifty futures were up 143.5 points or 0.8 percent at 17,688.5, suggesting a gap-up opening ahead on Dalal Street.
    Global markets
    Asian stocks rose as investor focus shifted to central bank meetings lined up this week. MSCI's broadest index of Asia Pacific shares outside Japan was up one percent. Japan's Nikkei 225 was up 0.9 percent and China's Shanghai Composite 1.1 percent.
    S&P 500 futures were up 0.4 percent in Asia.
    On Friday, Wall Street hit a record high, as market participants digested an inflation reading in line with consensus though consume prices saw the highest annual increase in nearly four decades.
    What to expect on Dalal Street
    The Nifty50's short-term trend continues to be rangebound, said HDFC Securities' Shetti. "The lack of selling pressure at important resistance could indicate higher chances of a sharp upside breakout of the hurdle in the near term, with immediate support at 17,400-17,380," he said.
    The Nifty is consolidating near crucial resistance at 17,500-17,600 levels for the past couple of sessions, a zone neared by key moving averages putting additional pressure on the index, according to Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas.
    "Structurally, the consolidation can continue for some more time before the Nifty prepares for the next leg on the upside. It can take a dip towards 17,300-17,250 in order to fill up a recent gap area on the daily chart. On the other hand, a closing above 17,600 will make room for the Nifty to take a shot at 18,000 subsequently," he said.
    Key levels to watch out for
    Nifty50: Support for the index is expected at 17,300 and resistance at 17,650, according to Mohit Nigam, Head-PMS at Hem Securities.
    Bank Nifty: The banking index is expected to find support at 36,650 and meet resistance at 37,500, he said.
    FII/DII activity
    Foreign institutional investors (FIIs) net offloaded Indian equities worth Rs 1,092.4 crore on Friday. However, domestic institutional investors made net purchases of Rs 386.6 crore, according to provisional exchange data.
    Call/put open interest
    The maximum call open interest is accumulated at the strike price of 18,000, with more than 83,000 contracts, and the next highest at 17,600, with more than 52,000 contracts. On the other hand, the maximum put call open interest is placed at 17,400, with more than 61,000 contracts, according to exchange data.
    This suggests immediate resistance at 17,600 followed by a major hurdle at 18,000, and support at 17,400.
    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 (%)
    SymbolCurrent OICMPPrice change (%)OI change (%)
    Short build-up
    SymbolCurrent OICMPPrice change (%)OI change (%)
    (Increase in open interest and decrease in price)
    52-week highs
    In the BSE 500 index, Vodafone Idea, Zee Entertainment, Adani Total Gas, Tanla, Thermax, Glaxo, ABB, Siemens and Welspun Corp were among the 13 stocks that hit 52-week highs.
    52-week lows
    On the other hand, two stocks in the broadest index on the bourse hit 52-week lows: Strides Pharma Science and Gulf Oil Lubricants.
    Volatility index
    NSE's India VIX index — which measures the expectation of volatility — eased for the fourth day in a row to end at 16.1, down 3.3 percent.
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