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Trade setup for Sept 13: Nifty50 to stay rangebound for now? Key market cues before Monday's session

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Angel Broking's Sameet Chavan believes bulls are clearly having a firm grip on the market but they might find some difficulty going forward. Here's how the September 13 session is poised to start.

Trade setup for Sept 13: Nifty50 to stay rangebound for now? Key market cues before Monday's session
Indian equity benchmarks ended a volatile session on Thursday marginally higher ahead of a long weekend. Gains in fast moving consumer goods and metal shares were offset by losses in select financial counters. Nifty Bank failed to remain positive, ending 0.2 percent lower, as weekly derivatives contracts expired at the end of the session. The market remained shut on Friday for Ganesh Chaturthi.
So, what do the charts suggest for Dalal Street?
The index formed a reasonable positive candle on the daily chart, a sign of continuation of rangebound action in the market, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities. No sharp weakness on the day of expiry of weekly derivatives and sustainable buying towards the end signals chances of a bounce in the coming sessions, he said.
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Bulls in control
"Although Nifty did look a bit uncomfortable around 17,400 last week, we did not see any major weakness overall. The moment it falls nearly a percent, buying tends to happen immediately," said Sameet Chavan, Chief Analyst - Technical & Derivatives at Angel Broking.
He believes bulls are clearly having a firm grip on the market for now but they might find some difficulty going forward.
Here are key things to know about the market before Monday's session:
SGX Nifty
Nifty futures trading on Singapore Exchange -- an early indicator of India's Nifty50 benchmark index -- were down 84 points or 0.48 percent at 17,356.5 at 8:05 am on Monday, hinting at a positive start ahead on Dalal Street.
Global markets
Equities in other Asian markets suffered mild losses ahead of US and Chinese economic data due this week. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1 percent; Japan's Nikkei 225 index was near peaks last visited in 1990. S&P 500 futures were up 0.2 percent. On Friday, Wall Street's three main indices fell after the release of data on inflation in the world's largest economy. US producer prices rose in August, indicating that high inflation is likely to persist for a while.
What to expect on Dalal Street
HDFC Securities' Shetti expects the rangedound trend in the 50-scrip index to continue in the short term. "There is a possibility of an upside bounce in the early part of this week before the index encounters resistance around 17,500-17,600 levels," he said.
Key levels to watch out for
Nifty50: Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas, expects the index to move within a range of 17,000-17,500 in the short term.
Levels of 17,450-17,500 are now seen as a sturdy wall, and the first sign of weakness is expected only after a close below the support zone of 17,300- 17,250, according to Chavan. He advises traders to continue with a stock-centric approach by following strict stop losses and booking timely profits.
Bank Nifty: Chavan expects 37,000-36,000 levels to be the immediate range for the banking index before it takes out 37,000, a hurdle it is finding difficult to cross.
FII/DII activity
Foreign institutional investors pumped a net Rs 423.4 crore into the Indian capital market on Thursday, exchange data showed. Net purchases by domestic institutional investors stood at Rs 704.2 crore.
Call/put open interest
The maximum call open interest is accumulated at the strike price of 17,400, and next at 17,500. On the other hand, the maximum put open interest is at the strike price of 17,300, and next only at 17,000, NSE data shows. This indicates that immediate resistance can be expected at 17,400, and support comes in at 17,300, followed by 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 (%)
OFSS3,58,2504,8151.69%27.15%
NAM-INDIA39,80,8004390.37%16.36%
IEX68,93,750599.551.14%15.70%
INDHOTEL95,55,000151.62.71%11.67%
IDEA71,28,80,0008.453.68%9.03%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
NAUKRI11,59,3756,677.15-0.86%-6.88%
GODREJCP54,82,0001,109.35-0.25%-4.12%
POLYCAB5,67,6002,405-0.34%-4.07%
DRREDDY28,02,6254,908-0.09%-3.84%
MFSL31,83,7001,084-0.91%-3.53%
(Decrease in open interest and price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
IRCTC21,34,2753,2970.11%-22.02%
ASHOKLEY5,03,19,000125.42.96%-12.18%
COLPAL28,31,1501,738.501.51%-5.69%
INDUSINDBK1,60,65,0001,000.650.01%-3.84%
UBL14,29,4001,604.050.83%-3.77%
(Decrease in open interest and increase in price)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
SBILIFE65,87,2501,172-3.92%62.32%
CANFINHOME31,21,950627.55-2.26%17.71%
GUJGASLTD32,82,500680.3-1.66%9.52%
APOLLOHOSP23,07,5004,736.90-1.95%9.39%
HDFCAMC13,57,0003,255.55-0.94%9.21%
(Increase in open interest and decrease in price)
Stocks hitting 52-week highs
Twenty five stocks in the BSE 500 index — the broadest index on the bourse — clocked 52-week highs, including Bharti Airtel, Adani Transmission, Nestle, JSW Energy, Marico and Voltas. HDFC AMC, Abbott, Allcargo, Blue Dart, Concor, IEX, Naukri, Trident and Zensar Tech also hit the milestone.
52-week low
No stock in the BSE 500 universe hit a 52-week low. Outside the broadest index on the bourse, Glenmark Life and Aashka Hospitals were among the stocks that hit the trough.
Volatility gauge
The India VIX index — which measures the expectation of volatility in the market — eased 3.2 percent to 13.9 on Thursday, having moved within a range of 14.4-13.6 during the session.