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Trade setup for Nov 22: Can Nifty50 hold 17,700 for now? Check out key market cues before Monday's session

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The Nifty50 has formed a long negative 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.

Trade setup for Nov 22: Can Nifty50 hold 17,700 for now? Check out key market cues before Monday's session
Indian equity benchmarks continued to decline for a third straight day on Friday. Losses across sectors, led by IT, automobile and select financial shares, pulled the headline indices lower. Gains in heavyweights such as HDFC Bank, Reliance Industries and SBI lent some support.
What do the charts suggest for Dalal Street now?
The Nifty50 index has formed a long negative candle on the daily chart with upper and lower shadows, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
"Nifty is now placed at the edge of support at the ascending trend line, which is connected through the previous swing lows at 17,750. This is not a good sign and signals chances of a downside breakout of the trend line support in the short term," he said.

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Support at 17,600-17,640 levels is critical for the Nifty, which if compromised could be followed by a decline towards the 17,400-17,500 band, according to independent technical analyst Manish Shah.
"The long-term trend on the weekly chart is intact and we need to see a reversal in the intermediate term decline. The Nifty needs to move above 18,100 and hold higher for the current decline to reverse," he said.
Here are key things to know about the market before Monday's session:
SGX Nifty
At 7:59 am on Monday, Nifty futures trading on Singapore Exchange -- an early indicator of the Nifty50 index -- were up 65 points or 0.4 percent at 17,769, suggesting a positive opening ahead on Dalal Street.
Global markets
Equities in other Asian markets began the week on a positive note, as investors overlooked fresh lockdowns in Europe. MSCI's broadest index of Asia Pacific shares outside Japan was last up 0.3 percent. Japan's Nikkei 225 was down 0.2 percent.
S&P 500 futures were up 0.2 percent in early Asian trade. On Friday, Wall Street ended mixed amid fears of new lockdowns to curb the spread of COVID-19.  The S&P 500 and Dow Jones indices declined 0.1 percent and 0.8 percent respectively and the tech stocks-heavy Nasdaq Composite rose 0.4 percent to a record high.
What to expect on Dalal Street
HDFC Securities' Shetti believes the Nifty50's short-term trend continues to be weak. "Key support at 17,700 could be broken in the short term and that could open a larger downward correction to 17,200-17,100 levels in the next few weeks. Any attempt of an upside bounce from here could find resistance around 17,850-17,900 levels," he said.
A sustainable move below 17,700, which is likely, will activate the developing head and shoulder pattern on the daily chart, which could lead to a fresh leg of correction in the coming days, according to Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One.
"After this, the next levels to watch out for the Nifty will be 17,450 and 17,200, where one needs to reassess the situation. On the flipside, if the Nifty manages to hold 17,700 and move higher first, then 18,000-18,200 levels are to be considered as strong hurdles, which as of now we do not expect to get surpassed in the near future," he said.
Key levels to watch out for
Nifty50: Resistance for the Nifty50 is expected at 18,000 in the near term and support at 17,700, according to Mohit Nigam, Head-PMS at Hem Securities.
Bank Nifty: For the banking index, immediate support is seen at 37,680 and resistance at 38,396, he said.
"The market should be ready to see 17,600, 17,450 and 17,300 levels on the 50-scrip index in the coming week with a big hurdle at 17,950-18,000, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
Chouhan suggests traders to reduce long positions between 17,950 and 18,000 or to create short positions with a stop loss at 18,210.
FII/DII activity
Foreign institutional investors (FIIs) were net sellers of Indian equities worth Rs
3,930.6 crore on Thursday. Domestic institutional investors, however, made net purchases of Rs 1,885.7 crore, according to provisional exchange data.
Call/put open interest
The maximum open interest remains at the strike price of 18,200, and there is a high degree of accumulation at the 18,000 mark. The maximum put open interest has moved to 17,750 from 17,800, and the next highest interest is at 17,700, NSE data shows.
This suggests immediate resistance can be expected at 18,000 followed by a major hurdle once again at 18,200, and support comes in at 17,750.
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 (%)
PNB13,06,40,00041.852.57%954.91%
SBIN2,31,07,500505.80.93%93.09%
ESCORTS47,66,8501,804.459.94%249.76%
HDFCBANK91,80,6001,548.600.53%42.02%
RELIANCE65,14,0002,485.001.20%35.75%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
ADANIPORTS8,98,11,250724-1.88%-43.60%
VEDL15,87,78,900310-8.46%-23.10%
UPL2,18,60,800743.2-1.84%-21.84%
GRASIM92,57,2751,773.65-1.22%-19.09%
MCDOWELL-N1,76,18,750917.05-1.41%-18.45%
(Decrease in open interest and price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
ESCORTS73,22,7001,7959.77%-44.16%
PNB27,16,96,00041.62.34%-38.57%
SBIN10,02,09,000503.950.96%-9.98%
INDIACEM1,12,89,7002020.47%-9.27%
ASTRAL5,89,0502,3030.42%-8.82%
(Increase in price and decrease in open interest)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
IPCALAB27,90,6752,026.30-1.48%4.70%
GMRINFRA12,69,22,50039.2-1.75%0.78%
RECLTD3,87,00,000136-1.77%0.73%
ICICIPRULI37,05,000640.6-0.54%0.14%
(Increase in open interest and decrease in price)
52-week highs
Escorts, L&T Technology Services, Birlasoft, Mindtree and Persistent were among the 13 stocks in the BSE 500 index — the broadest gauge on the bourse — that hit 52-week highs.
52-week lows
Ten stocks in the index hit 52-week lows, including Aurobindo Pharma, Aegis Logistics, Amara Raja, Bayer Cropscience and Spandana Sphoorty.
Volatility gauge
NSE's India VIX index — which gauges the expectation of volatility in the near term — eased 0.8 percent to 14.9 on Thursday, having moved within a 12.1-16.2 range during the last session of the trading week.
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