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Trade setup for Dec 30: Will Nifty50 cross key hurdles anytime soon? Check out market cues before Thursday's session

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Trade setup for Thursday, December 30: More weakness can be expected in the Nifty in the short term, as the market lacks the strength to surpass crucial resistance, says Nagaraj Shetti of HDFC Securities. Here's what the technical charts suggest for the coming session on Dalal Street.

Trade setup for Dec 30: Will Nifty50 cross key hurdles anytime soon? Check out market cues before Thursday's session
Indian equity benchmarks ended a choppy session mildly lower on Wednesday, as gains in pharma and auto stocks were offset by financial and IT counters. Investors stayed cautious amid concerns about the Omicron variant of COVID-19 amid increasing infections.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a small negative candle on the daily chart with an upper shadow, signalling lacklustre movement at crucial overhead resistance, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
He sees the possibility of a downward correction in the market from the highs.

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Weakness up ahead?
The 50-scrip index has maintained a higher bottom pattern but formed a hammer candlestick near important resistance following a strong pullback rally, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. This indicates a strong possibility of short-term weakness.
"For trend following traders, an important level to watch is 17,200, above which the uptrend momentum could continue up to 17,300-17,350 levels. But if the Nifty slips below 17,180, there is a strong possibility of an intraday correction up to 17,140-17,100 levels," he said.
Here are key things to know about the market before Thursday's session:
SGX Nifty
At 7:42 am on Thursday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty50 gauge -- were up 33 points or 0.2 percent at
17,302.5, suggesting a positive opening ahead on Dalal Street.
Global markets
Equities in other Asian markets were largely higher as the Omicron variant of COVID-19 remained in focus. MSCI's broadest index of Asia Pacific shares outside Japan was up 0.3 percent. Japan's Nikkei 225 was down 0.2 percent, China's Shanghai Composite up 0.5 percent and Hong Kong's Hang Seng up 0.5 percent.
S&P 500 futures were flat in Asia, a day after the S&P 500 and the Dow Jones indices rose 0.1-0.3 percent to record highs on Wall Street though the Nasdaq Composite declined 0.1 percent.
What to expect on Dalal Street
HDFC Securities' Shetti believes the market lacks the strength to surpass crucial resistance. "There is a high possibility of further consolidation or a downward correction in the next 1-2 sessions before the Nifty50 shows a bounce from the lows, with immediate support at 17,100," he said.
The expiry of monthly F&O contracts on Thursday is likely to keep volatility high, said Ajit Mishra, VP-Research at Religare Broking.
NSE's India VIX index — which gauges the expectation of volatility in the market — eased 1.4 percent to finish at 16.2 on Wednesday, having risen as much as 2.3 percent during the session
"The banking pack is still struggling and its performance would be critical for the next directional move. In the absence of any event, updates on COVID-19 cases would remain on participants’ radar," he said.
Key levels to watch out for
Nifty50: Immediate support for the index is expected at 17,000 and immediate support at 17,400, according to Mohit Nigam, Head-PMS at Hem Securities. Technically, the overall structure looks positive for the Nifty50 as it manages to sustain above 17,200 on a closing basis, he said. 
Bank Nifty: For the banking index, Nigam sees immediate support at 34,500 and immediate resistance at 35,500.
FII/DII activity
Foreign institutional investors (FIIs) net sold Indian equities worth Rs 975.2 crore on Wednesday, though domestic institutional investors made net purchases of Rs 1,006.9 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 17,500, with 1.8 lakh contracts, and the next highest at 17,300, with 1.6 lakh contracts, according to exchange data. The maximum put open interest is accumulated at the strike price of 17,000, with almost two lakh contracts, and the next highest at 17,200, 17,100 and 16,700, with 1.3 lakh contracts each, the data showed.
This suggests immediate resistance at 17,300 mark followed by a major hurdle at 17,500, and significant support at Mount 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 (%)
APOLLOHOSP10,20,3754,972.902.43%38.78%
HDFC58,46,1002,567.050.03%30.48%
BALKRISIND6,40,4002,240.700.20%28.20%
PIIND6,12,2503,012.950.30%22.95%
ULTRACEMCO6,56,3007,408.250.04%21.94%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
IEX1,72,65,000252.4-1.33%-29.34%
TORNTPOWER16,99,500540.3-0.85%-25.42%
POLYCAB2,32,2002,397.65-0.19%-22.48%
PETRONET45,96,000217.45-0.21%-20.50%
GSPL6,66,400294.3-0.73%-19.90%
(Decrease in open interest as well as price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
SYNGENE4,81,1006051.20%-35.69%
AARTIIND9,20,550989.70.08%-27.52%
APLLTD8,81,1008030.43%-23.72%
LAURUSLABS16,02,000548.43.56%-23.65%
AMARAJABAT35,33,000621.40.53%-13.36%
(Decrease in open interest and increase in price)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
MINDTREE12,61,0004,634.90-0.87%48.12%
JKCEMENT1,27,0503,190-5.71%38.15%
MFSL8,02,100964.15-0.49%27.23%
CROMPTON11,02,200428.95-1.45%21.76%
SHREECEM95,95026,605-0.40%21.44%
(Increase in open interest and decrease in price)
52-week highs
In the BSE 500 pack, Escorts, ESAB, Metropolis Healthcare, Minda Industries, Radico Khaitan, KIMS, Vardhman Textiles and Schaeffler hit 52-week highs.
52-week lows
Two stocks in the broadest index on the bourse hit 52-week lows: MAS Financial Services and Gillette.
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