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Trade setup for Jan 6: Can Nifty50 cross 18,000 soon? Check out key market cues before Thursday's session

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Trade setup for Thursday, January 6: The Nifty50 appears to be in a strong uptrend but profit booking close to the 18,000 hurdle cannot be ruled out, say experts. Here's what the technical charts suggest for the coming session on Dalal Street and the key levels to watch out for along with vital data.

Trade setup for Jan 6: Can Nifty50 cross 18,000 soon? Check out key market cues before Thursday's session
Indian equity benchmarks extended their winning streak to a fourth straight session on Wednesday. Buying in financial, consumer and metal shares aided the headline indices' gains though IT stocks played spoilsport.
What do the charts suggest for Dalal Street now?
The Nifty50 has formed a reasonable long candle on the daily chart with minor upper and lower shadows, suggesting the continuation of an uptrend, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities. 
Some consolidation or minor correction from the highs is possible, he said. 

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Profit booking can't be ruled out at 18k
Technically, the market appears to be in a strong uptrend, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. "Now, 18,000 would act as an important hurdle for traders. Due to the overstretched rally, profit booking near 18,000 is not ruled out," he said. 
He believes 17,800 to be an important level to watch for trend-following traders, above which, the same bullish formation will continue up to 17,950-18,000 levels. "On the other side, a move below 17,800 could possibly open correction waves till 17,750-17,710. Contra traders can take a bet near 18,000 with a strict stop loss at the resistance level of 18,050," Chouhan added. 
Here are key things to know about the market before the January 6 session:
SGX Nifty
At 7:46 am on Thursday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were down 127.5 points or 0.7 percent at 17,846, suggesting a gap-down opening ahead on Dalal Street.
Global markets
Equities in other Asian markets fell tracking deep losses on Wall Street overnight, after minutes of the latest Fed meeting indicated Fed officials were ready to hike interest rates sooner than expected. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.2 percent.
Japan's Nikkei 225 tumbled 1.9 percent and China's Shanghai Composite fell 0.4 percent. Hong Kong's Hang Seng was flat.
S&P 500 futures were up 0.1 percent in Asia. On Wednesday, the S&P 500 tanked 1.9 percent, the Dow Jones 1.1 percent and the technology stocks-heavy Nasdaq Composite 3.3 percent.
What to expect on Dalal Street
HDFC Securities' Shetti sees the possibility of consolidation or minor weakness near 18,000 in the coming 1-2 sessions, with immediate support at 17,760.
Some resistance can be expected in the market as the Nifty has approached the 18,150-18,200 barrier, independent technical analyst Manish Shah said. "Buying on declines should be the preferred strategy. Any drop towards support at 17,650-17,700 should be a buying opportunity," he said.
Key levels to watch out for
Nifty50: The 50-scrip index has immediate support at 17,600 and resistance at 18,200, according to Mohit Nigam, Head-PMS at Hem Securities.
Bank Nifty: For the banking index, he sees support at 37,300 and resistance at 38,200.
FII/DII activity
Foreign institutional investors (FIIs) net purchased Indian equities worth Rs 336.8 crore on Wednesday. Net buys by domestic institutional investors stood at Rs 1,272 crore, according to provisional exchange data. However, December was a third straight month of FII outflows for Indian equities.
Call/put open interest
The maximum call open interest is accumulated at the 18,000 strike, with 1.4 lakh contracts, and the next highest at 18,100 and 18,200 levels, with 1.1-1.2 lakh contracts each, according to exchange data. On the other hand, the maximum put open interest is placed at the 17,800 mark, with 1.2 lakh contracts.
This reflects the major hurdle at 18,000 that the Nifty50 is approaching, with a cushion 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 (%)
TATACOMM12,15,6001,512.955.93%61.93%
HONAUT4,74043,7503.04%44.30%
CHAMBLFERT20,59,500432.35.65%41.30%
HINDCOPPER69,05,800135.40.93%34.56%
NBCC86,64,00046.91.63%28.67%
Long unwinding
SymbolCurrent OICMPPrice change (%)OI change (%)
ALKEM3,15,8003,608.95-0.41%-1.90%
GUJGASLTD23,76,250644.95-0.97%-1.10%
SRF29,08,5002,426.35-0.61%-1.06%
ABBOTINDIA32,22518,900-1%-0.70%
TORNTPHARM7,26,0003,212.40-0.44%-0.31%
(Decrease in open interest as well as price)
Short-covering
SymbolCurrent OICMPPrice change (%)OI change (%)
RECLTD3,53,82,000137.050.33%-0.95%
DABUR1,03,15,000584.251.27%-0.74%
NMDC7,64,53,700139.052.13%-0.64%
CANBK5,23,69,200211.251.86%-0.62%
BOSCHLTD1,61,20017,347.900.57%-0.59%
Short build-up
SymbolCurrent OICMPPrice change (%)OI change (%)
LTI6,67,9507,350.75-3.27%21.60%
DIXON4,08,1255,345-2.99%15.31%
PERSISTENT4,35,1504,694-3.44%13.06%
APLLTD16,91,200817.1-2.85%11.55%
COFORGE6,63,9005,836.30-3.86%10.42%
(Increase in open interest and decrease in price)
52-week highs
In the BSE 500 pack, Asian Paints, GMR Infra, Tata Communications, Pidilite, Radico Khaitan and Balrampur Chini were among the 13 stocks that hit 52-week highs.
52-week lows
One stock in the broadest index on the bourse hit a 52 -week low: MAS Financial Services.
Volatility gauge
NSE's India VIX index — which gauges the expectation of volatility — jumped 6.9 percent to 17.2, its biggest jump since December 20.
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