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Trade setup for Sept 9: Decisive bounce due in Nifty50? Key market cues before Thursday's session

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The 50-scrip benchmark is likely to meet resistance near 17,400, say analysts. Here's how the September 9 session is poised to start.

Trade setup for Sept 9: Decisive bounce due in Nifty50? Key market cues before Thursday's session
Indian equity benchmarks ended a choppy session marginally lower on Wednesday amid weakness across global markets. Gains in banking and financial services shares were offset by losses in IT and automobile counters.
Nifty Bank rose 0.8 percent, breaking a three-day losing streak.
So, what do the charts suggest for Dalal Street?
The index formed a small negative candle on the daily chart with a long lower shadow, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities. He believes a positive session on Thursday could indicate chances of more upside ahead.
Indecision
There appears to be indecision in the market, according to Rohit Singre, Senior Technical Analyst at LKP Securities.
"Nifty is unable to cross its immediate swing high, which is around 17,440, which will act as immediate and strong resistance, followed by 17,500. Any break above the mentioned resistance levels may see good traction and take the index towards the 18,000 mark," he said.
Here are key things to know about the market before Thursday's session:
SGX Nifty
Nifty futures trading on Singapore Exchange -- an early indicator of India's Nifty50 index -- traded 58 points or 0.3 percent lower at 17,324.5 at 8:36 am on Thursday, indicating a negative start ahead on Dalal Street. The Indian market will remain shut on Friday for a holiday.
Global markets
Equities in other Asian markets dropped amid a cautious mood among investors globally as they worried about slowing economic growth and tapering of central bank stimuli. All eyes were on the European Central Bank, which is due to meet later in the day. MSCI's broadest index of Asia-Pacific shares outside Japan was last seen trading one percent lower. Japan's Nikkei benchmark was down 0.4 percent.
Overnight on Wall Street, the three main indices fell amid concerns about the spread of the Delta variant of Covid. Analysts fear it would create uncertainty over the timeline for the US central bank to taper its stimulus. S&P 500 E-Mini futures were down 0.2 percent, suggesting a weak start ahead in the US on Thursday.
What to expect on Dalal Street
HDFC Securities' Shetti expects the current short-term consolidation to end soon. "That could open a decisive bounce from the lows in the next one or two sessions. The confirmation of a higher bottom is likely to pull Nifty50 towards 17,550-17,600 levels by the next week," he said.
Rahul Sharma, Co-Founder of Equity99, believes an uptrend is still intact in the index. He said stocks from the banking, financial services and insurance (BSFI), metals, IT and textile spaces will be in focus on Thursday.
Key levels to watch out for
Nifty50: The index has strong support at 17,300, followed by 17,225-17,150 levels, and expected to meet resistance in the 17,425-17,500 zone, according to Sharma.
Bank Nifty: The banking index has major support at 36,600, followed by 36,450-36,300, and faces a hurdle at 36,900-37,100, he said.
FII/DII activity
Net outflow by foreign institutional investors from the Indian capital market stood at Rs 802.51 crore on Wednesday, exchange data showed.
Call/put open interest
There is a high degree of call open interest at the strike prices of 17,400 and 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 (%)
TRENT14,35,5001,040.853.79%36.16%
NAM-INDIA33,80,800440.754.88%23.28%
NAUKRI9,93,7506,722.158.28%19.65%
HDFCAMC11,56,2003,3145.88%17.11%
INDIAMART2,31,6759,0252.67%15.64%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
HINDALCO3,53,03,000457-1.53%-2.38%
TCS98,32,2003,790-0.98%-1.64%
STAR18,92,025596-0.47%-1.61%
APOLLOTYRE1,22,30,000215.1-1.65%-1.37%
MGL18,07,2001,166.95-0.01%-0.83%
(Decrease in open interest and price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
FEDERALBNK8,03,70,00083.652.14%-3.84%
AUBANK42,56,5001,1841.33%-2.10%
LTI7,40,4005,430.450.25%-1.58%
TORNTPOWER34,47,000485.152.79%-1.57%
TATACONSUM85,81,950879.50.91%-1.10%
(Decrease in open interest and increase in price)
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
IRCTC19,80,2253,273.35-0.38%17.92%
INDUSTOWER1,26,67,200235.9-2.68%17.35%
SBILIFE66,93,0001,215-1.97%11.45%
OFSS3,24,3754,749.25-0.13%10.60%
NAVINFLUOR4,22,1004,020.45-3.17%10.18%
(Increase in open interest and decrease in price)
Stocks hitting 52-week highs
Thirty four stocks in the BSE 500 index — the broadest index on the bourse — clocked 52-week highs, including Bharti Airtel, Nestle, Naukri, Titan, Voltas, Trent, UltraTech, Ambuja Cements, IRCTC and TeamLease. Trident, UBL, PI Industries, Pfizer, Oil India, Allcargo, Bajaj Electricals, Blue Dart, Brigade, ICICI Prudential Life, IEX and Mahindra Holidays also hit the milestone.
52-week low
Only one stock in the BSE 500 universe hit a 52-week low: Ujjivan Financial Services.
Volatility gauge
The India VIX index — which measures the expectation of volatility in the market — cooled off 3.25 percent to 14.41 on Wednesday, having moved within a wide range of 12.49-15.06 during the session.