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Trade setup for Dec 29: Bulls to take a break from lifting Nifty? Check out key market cues before Wednesday's session

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Trade setup for Wednesday, December 29: The Nifty50 has formed a long bull candle on the daily chart, says Nagaraj Shetti of HDFC Securities. Here's what the technical charts suggest for the coming session on Dalal Street.

Trade setup for Dec 29: Bulls to take a break from lifting Nifty? Check out key market cues before Wednesday's session
Indian equity benchmarks extended gains to a second straight day on Tuesday, though caution prevailed over the Omicron variant of COVID-19. Buying across sectors, especially financial, IT and oil & gas stocks, pushed the headline indices higher.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a long bull candle on the daily chart, suggesting continuation of an uptrend, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. The latest upmove has negated Friday's bearish engulfing pattern in a positive sign, he said.
"The negative sequence of lower tops and bottoms is still intact on the daily chart, and a decisive move above 17,400 is likely to negate this bearish pattern," he added.

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Bulls getting tired
The index has managed to close above its 20-day simple moving average after a long time, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. "The short-term texture is bullish but due to the recent gains, the bulls may prefer to take a pause near 17,275-17,300 levels," he said.
Chouhan expects quick intraday correction that can continue up to 17,100-17,160 levels if the Nifty50 trades below 17,180, and an uptrend that may continue up to 17,300-17,370 levels if it crosses 17,200.
Here are key things to know about the market before Wednesday's session:
SGX Nifty
At 7:45 am on Wednesday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty50 index -- were down 61.5 points or 0.4 percent at 17,254, suggesting a weak opening ahead on Dalal Street.
Global markets
Equities in other Asian markets fell as investors positioned their portfolios for the New Year amid caution against increasing Omicron cases around the globe. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.6 percent at the last count.
Japan's Nikkei 225 was down 1.1 percent, China's Shanghai Composite 0.5 percent and Hong Kong's Hang Seng 0.8 percent.
S&P 500 futures were flat in Asia. On Wall Street, the S&P 500 and the Nasdaq Composite ended 0.1 percent and 0.6 percent lower respectively on Tuesday, though the Dow Jones managed to rise 0.3 percent.
What to expect on Dalal Street
HDFC Securities' Shetti believes the Nifty can take out next important resistance at 17,350 in the short term. Any decline from the highs could be a buying opportunity, with immediate support at 17,120, he said.
"The Street seems quite confident that it can overcome the challenges of the Omicron variant. Technically, the ongoing upbeat bullish mood will take the Nifty to the 17,500-17,750 zone from an interweek view," said Prashanth Tapse, Vice President (Research) at Mehta Equities.
However, he warned that optimism could reverse and cause a nasty New Year's hangover only if the index slips below 16,833.
Key levels to watch out for
Nifty50: Support for the index is expected at 17,000 and resistance at 17,400, according to Sachin Gupta, AVP-Research at Choice Broking.
Bank Nifty: For the banking index, Gupta sees support at 34,700 and resistance at 35,600.
FII/DII activity
Foreign institutional investors (FIIs) net purchased Indian equities worth Rs 207.3 crore on Tuesday, in contrast to the recent trend. Net buys by domestic institutional investors stood at Rs 567.5 crore, according to provisional exchange data.
However, Indian equities are on track for a third straight month of FII outflows.
Call/put open interest
The maximum call open interest is placed at the strike price of 18,000, with 1.4 lakh contracts, and the next highet at 17,500, with slightly fewer contracts, according to exchange data. The maximum put open interest is placed at Mount 17,000, with almost two lakh contracts, the data shows.
This suggests immediate resistance at 17,500 followed by the major hurdle of 18,000, and meaningful support only at 17,000.
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 (%)
GODREJCP37,47,000966.851.08%36.75%
TVSMOTOR65,60,400612.50.80%31.78%
SIEMENS15,53,2002,406.851.97%31.55%
FEDERALBNK6,58,90,00081.90.80%27.77%
M&M89,57,200839.32.22%26.96%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
NAVINFLUOR4,87,8004,237.05-0.58%-15.31%
FSL56,03,000180.4-2.43%-13.92%
DIXON2,94,3755,592.75-0.72%-12.99%
OBEROIRLTY24,33,900860-0.45%-9.61%
POWERGRID1,80,73,537204.8-0.53%-7.82%
(Decrease in open interest as well as price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
AARTIIND16,18,400987.51.88%-33.51%
BOSCHLTD1,04,15016,725.150.41%-32.98%
LAURUSLABS24,92,100529.051.58%-26.69%
MANAPPURAM1,23,54,000166.50.73%-26.08%
COROMANDEL6,68,750751.10.14%-21.59%
(Decrease in open interest and increase in price)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
TORNTPHARM5,84,5003,142.90-0.50%16.77%
JUBLFOOD11,02,6253,514-0.17%14.73%
AUROPHARMA84,19,450726.5-0.19%8.04%
LTTS3,86,4005,479-0.13%7.45%
PEL22,55,5502,599.25-0.30%5.89%
(Increase in open interest and decrease in price)
52-week highs
In the BSE 500 index, Tech Mahindra, Birlasoft, KPIT Tech, ESAB, KPR Mill, Metropolis Healthcare, Minda Industries and Navin Fluorine hit 52-week highs.
52-week lows
Three stocks in the broadest index on the bourse hit 52-week lows: MAS Financial Services, Jyothy Labs and Gillette.
Volatility gauge
NSE's India VIX index — which gauges the expectation of volatility in the market — eased 3.8 percent to 16.5 on Tuesday
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