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Trade setup for Oct 1: Will Nifty50 slip to 17,500? Key market cues before Friday's session

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Rahul Sharma of Equity99 says the market appears to be in a consolidation mode, and can fall further. Here's how the coming session is poised to start on Dalal Street.

Trade setup for Oct 1: Will Nifty50 slip to 17,500? Key market cues before Friday's session
Indian equity benchmarks extended losses to a third straight day in a volatile session on Thursday, as traders rushed to settle their positions ahead of the expiry of monthly derivatives. With that, the Nifty50 index took its loss to 1.3 percent in three days, finishing the month down 2.8 percent.
So, what do the charts suggest for Dalal Street?
The 50-scrip index formed a small negative candle on the daily chart, in a signal that weakness could extend to the next session, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities. The market failed to confirm the formation of a bullish high wave type pattern of the previous day, he said.
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Medium-term structure positive
"Investors booked profit on the expiry day due to lack of fresh triggers and tepid global cues. Nifty has formed a lower top formation on the daily chart, which is largely negative. However, the medium-term structure is still positive," said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
Here are key things to know about the market before Friday's session:
SGS Nifty
At 8:14 am on Friday, Nifty futures trading on Singapore Exchange -- an early indicator of the Nifty index in India -- were down 154.5 points or 0.9 percent at
17,447.5, suggesting a gap-down opening ahead on Dalal Street.
Global markets
Equities in other Asian markets followed Wall Street sharply lower as risk sentiment soured amid growing worries about inflation. MSCI's broadest index of Asia-Pacific shares outside Japan was last seen trading half a percent lower  while Japan’s Nikkei 225 index was down 0.9 percent. Chinese markets were closed for the Golden Week holiday.
S&P 500 futures were down 0.5 percent in early Asian trade, hinting at a negative start in the US on Friday, a day after the S&P 500 index posted its worst month since the onset of the pandemic.
What to expect on Dalal Street
HDFC Securities' Shetti said there is a possibility of it hitting the next support level of 17,475 amid rangebound action in the next 1-2 sessions. He, however, added that there is a higher possibility of the emergence of buying interest from lower levels.
Rahul Sharma, Co-Founder of Equity99, said: "The market is expected to fall further as it is in a consolidation mode." He expects automobiles, banking, real estate and telecom stocks to be in focus on Friday.
Key levels to watch out for
Nifty50: The level of 17,700 could act as strong resistance for the index, below which, the correction could continue up to 17,500-17,450 levels. An immediate hurdle beyond 17,700 will be 17,750. Any revival in the market could lift the index to the 17,800 mark, according to Chouhan.
Sharma expects immediate support at 17,575, followed by 17,525, and bigger support at 17,450. He sees resistance still at 17,720, followed by 17,800.
Bank Nifty: Support for the banking index is placed at 37,175, followed by 37,000-36,800 levels, and an immediate hurdle seen at 37,500, Sharma said.
FII/DII activity
Foreign institutional investors (FIIs) withdrew a net Rs 2,225.6 crore from Indian equities on Thursday. Domestic institutional investors (DIIs), however, made net purchases of Rs 97.2 crore, exchange data showed.
Call/put open interest
While the maximum call open interest is placed at the strike price of 18,000, there is high accumulation at 17,700. On the other hand, the maximum put open interest is at 17,600, and next at 17,500 followed by 17,400, NSE data shows. This suggests immediate resistance can be expected at 17,700 and support comes in at 17,600, followed by 17,500.
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 (%)
HINDUNILVR26,55,9002,703.700.56%51.93%
TRENT7,38,7751,0332.40%49.07%
TITAN17,97,7502,150.800.11%44.12%
BAJFINANCE10,44,7507,677.901.90%31.66%
SBILIFE36,20,2501,210.350.40%24.86%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
ICICIGI5,39,7501,592.85-0.03%-66.54%
METROPOLIS77,8002,693.10-0.82%-55.01%
GRANULES21,99,450317.5-1.61%-52.36%
TVSMOTOR8,61,000550.15-0.36%-49.27%
HDFCBANK43,30,1501,592.80-0.40%-44.49%
(Decrease in open interest and price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
DIXON1,29,0004,633.654.25%-51.26%
VOLTAS7,99,5001,225.251.52%-49.34%
GODREJPROP5,74,6002,312.550.02%-46.95%
ALKEM36,0003,968.400.55%-27.78%
CANFINHOME7,37,100688.95.28%-25.66%
(Decrease in open interest and increase in price)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
MOTHERSUMI1,19,28,000227.2-1.11%71.48%
PAGEIND23,16031,797.60-1.81%60.23%
BHARATFORG21,63,000733.9-1.46%45.42%
CIPLA62,24,400980.55-0.42%45.08%
MARUTI9,40,8007,293.80-1.20%44.05%
(Increase in open interest and decrease in price)
52-week highs
Indian Oil, Canara Bank, Titan, Grasim, Hindalco, Allcargo, Eveready, IEX, IDBI, Tata Power, Tata Chemicals, Tata Investment were among the BSE 500 stocks that clocked 52-week highs. 
52-week lows
CarTrade Tech, Krsnaa and Suvidhaa Infoserve were among the 20 stocks that hit the trough.
Volatility gauge
NSE's India VIX index -- which measures the expectation of volatility in the near term --  eased 2.3 percent to 18.4 on Thursday, having moved within a 17.2-19.1 range during the choppy session.
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