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Trade setup for Oct 13: More upside for Nifty50 ahead? Key market cues before Wednesday’s session

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The Nifty50 index has formed a narrow range candle. What does this mean for the coming session and how is Dalal Street poised to start on Wednesday? Read on...

Trade setup for Oct 13: More upside for Nifty50 ahead? Key market cues before Wednesday’s session
Dalal Street took its winning streak to new record highs on Tuesday, shrugging off weakness across global markets. Gains in auto, metal, FMCG and select financial stocks were offset by sharp losses in IT counters amid choppy trade. The Bank Nifty index also hit a peak.
Analysts awaited more quarterly results from India Inc after TCS kicked off the earnings season last week.
What do the charts suggest for Dalal Street now?
The Nifty50 index has formed a narrow range candle with the close at its top end, said independent analyst Manish Shah.
"We have two days into the weekly expiry. If Nifty holds above 17,880, we can expect a rally to 18,150-18,200. If this does not happen, we can surely expect to see this by the next weekly expiry," he said. 
More upside possible
The 60-minute charts show that although the 50-scrip index has corrected from Monday's highs, it has bounced back to close above the 20-period moving average, said Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities. This suggests that the short-term uptrend is likely to continue, he said.
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Here are key things to know about the market before Wednesday's session:
SGX Nifty
At 7:59 am on Wednesday, Nifty futures trading on Singapore Exchange -- an early indicator of the Nifty50 index -- were up 53.5 points or 0.3 percent at
18,058, suggesting a positive start ahead on Dalal Street.
Global markets
Equities in other Asian markets were on edge amid concerns about soaring power prices fuelling inflation, driving expectations the US would taper its emergency bond buying programme. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent. Japan's Nikkei declined 0.1 percent. China's Shanghai Composite was down 0.6 percent, Hong Kong's Hang Seng down 1.4 percent, Singapore's Straits Times up 1.2 percent and South Korea's Kospi up 1.1 percent.
S&P 500 E-Mini futures were down 0.2 percent, hinting at a mildly positive start in the US on Wednesday, a day after the three main US indices finished a choppy session 0.1-0.3 percent lower.
What to expect on Dalal Street
The market has respected the level of 17,850, which has been acting as a support base for the last two days, said Shrikant Chouhan, Head - Equity Research (Retail) at Kotak Securities.
"On Wednesday, if the Nifty crosses 18,050 level in the first half hour, we may see 18,150/18,200 levels in the near term. A failure to cross 18,050 will keep the market rangebound with a negative bias," he said.
Key levels to watch out for
Further upsides are likely in the 50-scrip index once immediate resistance at 18,009 is taken out, and the next resistance is at 18,100, and immediate support at 17,958, said Gangadharan.
The bias is bullish as long as the index holds the 17,880 level, according to Shah.
FII/DII activity
Foreign institutional investors (FIIs) pulled out a net Rs 278.3 crore from Indian equities on Tuesday. Net sales by domestic institutional investors (DIIs) stood at Rs 741.2 crore, exchange data showed.
Call/put open interest
The maximum call open interest is accumulated at the strike prices of 18,200 and 18,500. On the other hand, the maximum put open interest is at 17,800, NSE data shows.
This suggests the next immediate hurdle at 18,200, followed by 18,500, and support at 17,800.
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 (%)
BATAINDIA17,64,4002,110.806.98%28.68%
CROMPTON13,29,900483.90.34%21.09%
NAM-INDIA27,34,400447.50.91%20.54%
ABFRL93,73,000272.53.71%17.00%
SRF6,33,62512,4763.47%14.46%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
JKCEMENT75,2503,424-0.96%-7.44%
IDEA90,43,30,00010.6-2.75%-2.90%
APOLLOTYRE1,47,40,000239.95-0.56%-1.39%
BHARATFORG1,22,16,000790.7-0.62%-1.34%
ONGC5,49,47,200163.95-1.15%-1.07%
(Decrease in open interest and price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
BHEL12,54,75,000716.13%-7.72%
GODREJPROP23,48,4502,434.702.46%-5.65%
TATAMOTORS10,31,24,400422.31.13%-4.75%
IRCTC23,55,9254,847.901.17%-4.64%
BANKBARODA17,71,61,40088.20.63%-4.00%
(Decrease in open interest and increase in price)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
DALBHARAT3,44,5002,082.50-0.25%24.96%
HCLTECH1,88,30,0001,251.05-3.81%17.21%
INFY4,11,34,8001,677.75-0.49%13.04%
ZEEL5,60,40,000303.85-1.33%12.58%
APLLTD26,29,000822.5-0.17%11.88%
(Increase in open interest and decrease in price)
52-week highs
SBI, Sun Pharma, Tata Motors, Tata Power, Titan, Trent, IndusInd Bank, IDBI Bank and Canara Bank were among the 48 stocks in the BSE 500 universe that clocked 52-week highs. MCX, IEX, PVR Indian Hotels, Lemon Tree, Jubilant FoodWorks, Oberoi Realty, Pidilite and Bata were also among them. 
52-week lows
While no stock in the broadest index on the bourse hit a 52-week low, Generic Pharmasec and Krsnaa Diagnostics were among the 18 other scrips that hit the trough.
Volatility gauge
NSE's India VIX index — which measures the expectation of volatility in the near term — eased 1.5 percent to 15.9, having moved within a wide range of 13.9-16.4 on Tuesday.
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