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Trade setup for Dec 3: Can Nifty50 muscle to 17,500? What charts suggest ahead of Friday's market session

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What to expect from the market: The Nifty50 has formed a long bull candle on the daily chart, having taken out crossed crucial overhead resistance at 17,350, says Nagaraj Shetti of HDFC Securities. Here's what the technical charts suggest for the coming session on Dalal Street.

Trade setup for Dec 3: Can Nifty50 muscle to 17,500? What charts suggest ahead of Friday's market session
Indian equity benchmarks continued their strong bounce for a second straight day on Thursday, powered by buying across sectors led by financial, IT and oil & gas counters.
The Bank Nifty took its gain to more than two percent in two days, recovering most of the losses in the previous four days.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a long bull candle on the daily chart, having just crossed crucial overhead resistance at 17,350, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. 
"This is positive sign and displays strength of the bulls in a downtrend," he said.
The 17,530 hurdle
There is the possibility of the Nifty moving towards 17,530, where it left a bearish price gap, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
A close below 17,140 would be negative for the market, but it is advisable to buy the dips till then, said Chouhan, who also sees support at 17,240 and 17,200.
Here are key things to know about the market before Friday's session:
SGX Nifty
At 7:51 am on Friday, Singapore Exchange Nifty futures -- an early indicator of the Nifty50 index -- were down 61.5 points or 0.4 percent at 17,384, suggesting a weak opening ahead on Dalal Street.
Global markets
Equities in other Asian markets fell amid concerns about the Omicron variant of COVID-19, with MSCI's broadest index of Asia Pacific shares down 0.7 percent in early hours. Japan's Nikkei 225 was down 0.1 percent and Hong Kong's Hang Seng down one percent, though China's Shanghai Composite was up 0.3 percent.
S&P 500 futures in Asia were down half a percent. On Thursday, the three main Wall Street indices rose 0.8-1.8 percent.
What to expect on Dalal Street
The Nifty has been making higher lows for the past three sessions, said Siddhartha Khemka, Head-Retail Research at Motilal Oswal Financial Services. Now, the index needs to continue to hold the 17,350 zone for an upmove towards 17,500 and 17,777, with support seen at 17,150 and 17,000, he said.
Khemka suggests investors to buy in the current volatility in a staggered fashion to build long-term portfolios.
HDFC Securities' Shetti believes a decisive breakout from the 17,400-17,600 hurdle could change the short-term negative sentiment in the market. He, however, warns that any turndown close to the resistance band could bring the bears into action once again. Immediate support is placed around 17,300-17,250 levels, he said.
Key levels to watch out for
Nifty50: According to Sachin Gupta, AVP-Research at Choice Broking, the index has support at 17,250-17,100 levels and faces resistance at 17,600.
Bank Nifty: For the banking index, he expects support at 35,300 and resistance at 37,000-37,900 levels.
FII/DII activity
Foreign institutional investors (FIIs) net offloaded Indian equities worth Rs 909.7 crore on Thursday. However, domestic institutional investors made net purchases of Rs 1,372.7 crore, according to provisional exchange data.
Call/put open interest
The maximum call open interest is placed at the strike price of 17,500 with 1.5 lakh contracts, and the maximum put open interest at 16,500, with 1.1 lakh contracts, followed by 16,800, with 99,000 contracts, according to exchange data.
This suggests a major hurdle can be expected at 17,500, and immediate support cones in at 16,800, followed by major support at 16,500.
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 (%)
GUJGASLTD19,96,2506903.61%26.17%
MCX14,61,2501,6654.43%19.23%
PERSISTENT2,27,5504,388.704.03%16.35%
NMDC8,28,05,300142.753.78%15.11%
GMRINFRA11,93,85,00041.47.12%14.83%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
APLLTD18,59,550806.25-1.41%-3.19%
CHAMBLFERT21,99,000396-0.66%-1.23%
METROPOLIS6,05,2003,155-4.20%-0.33%
INDIAMART1,65,9007,375.45-1.21%-0.18%
GLENMARK94,13,900504-3.96%-0.11%
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
COALINDIA5,44,19,400159.652.21%-3.04%
L&TFH6,53,41,52879.31.86%-2.59%
ASIANPAINT41,34,6003,194.901.31%-1.30%
IBULHSGFIN4,60,13,3002541.40%-1.26%
ALKEM4,96,0003,4760.77%-1.25%
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
CROMPTON12,98,000435.55-1.07%35.76%
ICICIBANK10,51,83,375726-0.47%9.28%
BIOCON1,67,16,400368.7-1.05%8.24%
PFIZER1,87,8754,965-1.40%6.52%
NAUKRI9,24,2505,912.75-0.82%6.33%
(Increase in open interest and decrease in price)
52-week highs
Tech Mahindra, Power Grid, Bajaj Holdings, Shipping Corp, Gujarat Fluorochemicals and BEML were among the 10 stocks in the BSE 500 universe that hit 52-week highs.
52-week lows
Three stocks in the broadest index on the bourse hit the trough: Hero MotoCorp, VST Industries and Bajaj Consumer Care.
Volatility index
NSE's India VIX index — which gauges the expectation of volatility in the near term — came down seven percent to settle at 18.1 on Thursday, cooling off for a second back-to-back session.
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