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Trade setup for Oct 27: Nifty50 may need to hold 17,500 decisively for more upside in near term

Trade setup for Oct 27: Nifty50 may need to hold 17,500 decisively for more upside in near term

Trade setup for Oct 27: Nifty50 may need to hold 17,500 decisively for more upside in near term
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By Sandeep Singh  Oct 27, 2022 7:56:44 AM IST (Updated)

Trade setup for Thursday, October 27: The Nifty50 might continue to rise as long as it defends key support near 17,500 on corrections after halting its winning run, say experts. Here's what the technical charts suggest.

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Indian equity benchmarks halted a seven-session-long winning run on the first full session of Samvat 2079 on Tuesday, retreating from one-month closing highs clocked in the Muhurat trading session the previous day, as Dalal Street headed to a holiday.

Globally, investors stay concerned over the impact of steep hikes in interest rates to tame inflation on economic growth amid warnings of at least a mild recession the world over.

What do the charts suggest for Dalal Street?
The Nifty50 has formed a bearish candle on the daily chart, suggesting some profit taking at higher levels, according to Om Mehra, Technical Associate at
Choice Broking.
The 50-scrip index appears to have strong support at 17,500, close to its 50-day simple moving average, he said. "Momentum indicators RSI and MACD may shift from neutral to a somewhat negative zone... Price action on the charts indicates the market is likely to move largely within a broad range," he said.
Time to buy the dip in the banking basket
The Nifty Bank has witnessed some profit booking around 41,500, Kunal Shah, Senior Technical and Derivatives Analyst at LKP Securities, pointed out.
Period (No. of sessions)Simple moving average
517,672.2
1017,666.9
2017,627.8
5017,500.2
10017,340.9
20017,315.9
"The index remains in a buy-on-dips mode with strong support in the 40,500-40,000 zone... A breach above 41,500 will witness the extension of an upmove towards 42,000," he said.
Here are key things to know about the market ahead of the October 27 session:
SGX Nifty
On Thursday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — rose as much as 121 points or 0.7 percent to 17,959.5 ahead of the opening bell on Dalal Street.
Equities in other Asian markets largely saw positive moves, following a mixed session overnight on Wall Street, but concerns persisted about an economic slowdown. MSCI's broadest index of Asia Pacific shares outside Japan was up 1.9 percent at the last count.
Hong Kong's Hang Seng surged 3.3 percent and China's Shanghai Composite was up 0.4 percent, but Japan's Nikkei 225 edged 0.1 percent lower.
S&P 500 futures were up 0.3 percent. On Wednesday, the S&P 500 finished 0.2 percent, snapping a three-day winning run, though the Dow Jones and the Nasdaq Composite rose 0.5 percent and 1.3 percent respectively.
What to expect on Dalal Street?
HDFC Securities Senior Technical and Derivative Analyst Subash Gangadharan believes the Nifty50 continues to be in a short-term uptrend.
"The index looks set to move higher towards its previous intermediate highs close to 18,096... It is important for it to hold immediate support at 17,607-17,503 on any mild corrections for the uptrend to continue," he said.
Key levels to watch out for
The maximum call open interest is accumulated at the strike price of 18,000, with 2.3 lakh contracts, and the next highest at 17,800, with 1.5 lakh, according to provisional exchange data. The maximum put open interest is placed at 17,000 and 17,500, with 1.3 lakh contracts each, and at 17,300, with more than 85,000 contracts.
This indicates immediate resistance at 17,800 and immediate support at 17,500.
FII/DII activity
Foreign institutional investors (FIIs) net sold Indian shares worth Rs 247 crore on Tuesday, according to provisional exchange data.
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Long build-up
Here are two stocks that saw an increase in open interest as well as price:
StockCurrent OICMPPrice change (%)OI change (%)
BHEL35,196,00071.657.66%263.48%
INDIACEM2,528,800242.251.87%227.52%
Long unwinding
StockCurrent OICMPPrice change (%)OI change (%)
SBILIFE2,375,2501,250.70-0.70%-74.23%
IBULHSGFIN32,972,000127-0.90%-70.27%
NESTLEIND121,44020,289.90-2.96%-68.12%
DELTACORP14,241,600221.7-1.71%-67.23%
BATAINDIA1,066,7251,799.20-0.42%-66.18%
(Increase in price and decrease in open interest)
Short covering
StockCurrent OICMPPrice change (%)OI change (%)
BHEL89,796,00071.47.69%-79.61%
JSWSTEEL9,036,900645.752.31%-74.99%
MCDOWELL-N10,820,000864.43.62%-72.63%
HAVELLS1,630,5001,177.400.31%-70.78%
DLF19,133,400369.950.82%-68.83%
(Increase in price and decrease in open interest)
Short build-up
StockCurrent OICMPPrice change (%)OI change (%)
IBULHSGFIN8,620,000127.85-0.74%247.61%
DELTACORP4,399,900222.2-2.11%141.82%
(Decrease in price and increase in open interest)
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