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This article is more than 1 month old.

Trade setup for Oct 14: More steam left in Nifty50? Key market cues before Thursday’s session

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Nifty50 has formed a reasonably positive candle. What does this mean for the coming session and how is Dalal Street poised to start on Thursday? Read on...

Trade setup for Oct 14: More steam left in Nifty50? Key market cues before Thursday’s session
Indian equity benchmarks hit record closing highs for the third day in a row on Wednesday, backed by gains across most sectors led by auto, metal, IT and PSU banking shares. The Bank Nifty also extended its record-breaking run to a third straight session.
What do the charts suggest for Dalal Street now?
The Nifty50 index has formed a reasonably positive candle, and its short-term trend remains positive, said Subash Gangadharan, Senior Technical and Derivative Analyst at HDFC Securities. He expects follow-through buying in the coming days.
Support at Mount 18k
The index has shifted immediate support to 18,100-18,040 levels, and the existing longs can be held with a trailing stop loss below 18,000, suggests Rohit Singre, Senior Technical Analyst at LKP Securities. "Any dip will be a fresh buying opportunity for the overall target of 18,300-18,500 with an immediate hurdle near 18,200-18,300," he said. 
Here are key things to know about the market before Thursday's session:
SGX Nifty
At 8:26 am on Thursday, Nifty futures trading on Singapore Exchange — an early indicator of the Nifty50 index — were up 75.5 points or 0.4 percent at 18,255.5, hinting at a positive start ahead on Dalal Street.
Global Markets
Equities in other Asian markets moved higher tracking a largely positive session on Wall Street overnight led by technology stocks. Investors cheered rising optimism about a global recovery after the US central bank signalled it could start reducing its pandemic-era stimulus.
MSCI’s broadest index of Asia Pacific shares outside Japan was up 0.3 percent in early Asian trade, while Japan’s Nikkei 225 index was up one percent.
On Wall Street, the S&P 500 gained 0.3 percent and the tech stocks-heavy Nasdaq Composite 0.7 percent, but the Dow Jones Industrial Average finishes flat. S&P 500 E-Mini futures were up 0.3 percent early on Thursday, suggesting a positive start ahead in the US.
What to expect on Dalal Street
HDFC Securities' Gangadharan expects levels of around 18,400-18,500 on Nifty50 in the next one week, with immediate support at 18,050.
The formation on the short-term chart still looks positive but the bulls may take a cautious stance around 18,250-18,275 levels, according to Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. "For day traders, 18,100 would act as key support, above which, the uptrend wave will continue up to 18,200-18,275 levels. On the other hand, dismissal of 18,100 could possibly trigger a correction wave up to 18,040-17,980 levels," he said.
Rahul Sharma, Co-Founder of Equity99, expects banking, IT, auto, sugar and media shares to be in focus on Thursday.
Key levels to watch out for
Nifty50:  The index has strong support at 18,060, followed by 18,000, and resistance is expected at 18,200, and next at 18,350, according to Sharma. 
Bank Nifty: The banking index meets resistance at 38,900-39,000 levels, and finds support in the 38,500-38,350 band.
FII/DII activity
Foreign institutional investors (FIIs) net purchased Indian equities worth Rs 937.3 crore on Wednesday. However, net sales by domestic institutional investors (DIIs) stood at Rs 431.7 crore, exchange data showed.
Call/put open interest
The maximum call open interest is accumulated at the strike price of 18,200, followed by 18,300. On the other hand, the maximum put open interest is at 18,000, and next at 17,900, NSE data shows. This suggests that resistance can be expected at 18,200-18,300 for now, and support comes in at 18,000, followed by 17,900.
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 (%)
INDIAMART2,23,8759,5759.04%31.93%
M&M99,92,500940.15.48%29.48%
BHEL9,77,34,000767.12%27.14%
TATAMOTORS9,44,14,800510.420.95%16.11%
TATACHEM1,16,38,0001,122.4015.21%11.01%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
BATAINDIA21,67,0002,072-0.98%-4.95%
DELTACORP1,25,58,000283.7-0.87%-2.36%
IOC3,91,82,000131.6-0.19%-1.97%
HAVELLS47,94,5001,412-0.47%-1.84%
HINDPETRO1,92,29,400326.35-0.91%-1.68%
(Decrease in open interest and price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
SAIL17,25,29,500121.754.69%-4.38%
UBL15,19,7001,7260.16%-3.68%
JSWSTEEL4,42,28,700685.151.21%-2.53%
ASHOKLEY4,35,24,0001475.19%-2.48%
SUNTV1,37,77,500544.550.87%-2.16%
(Decrease in open interest and increase in price)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
SRF6,32,0002,403.15-3.10%445.09%
CANBK6,16,78,800187-0.11%10.48%
COLPAL23,20,8501,702.50-0.55%9.97%
TORNTPOWER42,51,000519.85-0.52%9.56%
INDIGO37,39,0002,025.45-1.19%8.76%
(Increase in open interest and decrease in price)
52-week highs
SBI, ITC, Tata Motors, Titan, Sun Pharma, Bajaj Finance, Ashok Leyland, M&M, Grasim, HPCL, Hindalco, PVR were among the 64 stocks in the BSE 500 universe that clocked 52-week highs. Divi's, Marico, Dixon, Indian Hotels, IEX, Power Grid, IDBI Bank, Nalco, Tata Chemicals, Tata Investment, Trent, Voltas, Tata Power and DMart were also among them. 
52-week lows
While no stock in the broadest index on the bourse hit a 52-week low, Triveni Enterprises and recent debutant Sansera Engineering were among the 23 other scrips that hit the trough.
Volatility gauge
NSE's India VIX index — which gauges the expectation of volatility in the near term — rose 1.6 percent to 16.1, having jumped as much as 2.3 percent during Wednesday's session.
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