Homemarket News

    Trade setup for Sept 6: More upside on the cards for Nifty but analysts see sustainable buying only after 17,800

    Trade setup for Sept 6: More upside on the cards for Nifty but analysts see sustainable buying only after 17,800

    Trade setup for Sept 6: More upside on the cards for Nifty but analysts see sustainable buying only after 17,800
    Read Time
    4 Min(s) Read
    Profile image

    By Sandeep Singh   IST (Published)

    Mini

    Trade setup for Tuesday, September 6: The Nifty50 may continue to rise but one can expect strong momentum only past the 17,800 level, say experts. Here's what the technical charts suggest.

    Indian equity benchmarks clocked gains to the tune of almost one percent on Monday backed by across-the-board buying. Globally, concerns about surging energy prices and aggressive hikes in COVID-era interest rates continued to hurt investors' appetite for risk.
    What do the charts suggest for Dalal Street?
    The Nifty50 has formed a reasonable positive candle on the daily chart beside Friday's negative one, reflecting rangebound in the market with a positive bias, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
    The 50-scrip index is stuck within a range of 17,300-17,800, he pointed out.
    Nifty Bank poised for higher levels
    The Nifty Bank appears to be in a strong uptrend with higher bottom formations intact on all timeframes, said Kunal Shah, Senior Technical Analyst at LKP Securities.
    "Having crossed a strong hurdle at 39,800, the banking index may move all the way towards the 41,000-41,500 zone. Lower-end support stands at 38,800-38,500 levels where fresh put writing has been observed," he said.
    Here are key things to know about the market ahead of the September 6 session:
    SGX Nifty
    On Tuesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — rose as much as 59 points or 0.3 percent to 17,743.5 ahead of the opening bell on Dalal Street.
    Equities in other Asian markets were largely in the green, with MSCI's broadest index of Asia Pacific shares outside Japan up 0.2 percent at the last count. China's Shanghai Composite was up 0.6 percent and Hong Kong's Hang Seng up 0.1 percent, though Japan's Nikkei 225 was flat.
    European markets fell on Monday, the euro dropped below 99 cents for the first time in twenty years and European gas prices surged after Russia said its main gas supply pipeline to Europe would stay shut. The pan-European Stoxx 600 finished 0.6 percent lower.
    S&P 500 futures were up half a percent in Asian trade on Tuesday. The US market will resume trade later in the day following a long weekend on account of the Labor Day holiday.
    What to expect on Dalal Street?
    HDFC Securities' Shetti believes sustainable buying could only emerge after the Nifty50 crosses 17,800.
    "A slide below immediate support at 17,300 could pull the Nifty to its next support at 17,000 in the near term. However, weekly and monthly charts are still positive and one may utilise any downward correction as a 'buy on dips' opportunity," he said.
    Key moving averages
    Both Nifty50 and Nifty Bank stand above their six main simple moving averages.
    Period (No. of sessions)SMA
    Nifty50Nifty Bank
    517,663.6
    39,807.9
    1017,625.339,700.5
    2017,592.939,523.8
    5017,553.239,165.4
    10017,627
    39,067.9
    20017,518.138,624.3
    Mohit Nigam, Head-PMS at Hem Securities, identified the following resistance and support levels:
    IndexSupportResistance
    Nifty5017,45017,800
    Nifty Bank39,70040,200
    FII/DII activity
    Foreign institutional investors (FIIs) took to net selling of Indian shares on Monday, in contrast to the trend in the past few weeks.
    Image
    Last month, they made net purchases to the tune of Rs 22,025.8 crore — the first month of net inflows after 10 straight months of outflows, whereas domestic institutional investors (DIIs) net sold shares worth Rs 7,068.9 crore.
    Call/put open interest
    The maximum call open interest is accumulated at the strike price of 18,000, with 1.4 lakh contracts, and the next highest at 17,700, with 1.2 lakh contracts, according to exchange data. On the other hand, the maximum put open interest is at 17,500, with 1.5 lakh contracts, and 17,600, with 1.4 lakh.
    This indicates a major hurdle at the 18,000 mark and immediate support at 17,600 followed by a strong base at 17,500.
    Long build-up
    Here are five stocks that saw an increase in open interest as well as price:
    StockCurrent OICMPPrice change (%)OI change (%)
    EXIDEIND22,302,000173.58.30%30.59%
    POWERGRID42,471,000225.20.18%18.29%
    AMARAJABAT6,053,0005436.26%14.36%
    RAIN10,556,000205.64.07%9.88%
    DIXON660,8754,229.202.61%9.67%
    Long unwinding
    StockCurrent OICMPPrice change (%)OI change (%)
    HONAUT11,50542,110.80-0.74%-2.61%
    INDIAMART420,3004,667-2.22%-2.36%
    IRCTC12,303,375711.45-0.31%-0.46%
    MOTHERSON44,185,500126.1-0.04%-0.25%
    (Increase in price and decrease in open interest)
    Short covering
    StockCurrent OICMPPrice change (%)OI change (%)
    HINDALCO25,787,100429.253.23%-3.13%
    RELIANCE37,085,0002,583.251.59%-2.59%
    DELTACORP20,545,900212.20.12%-2.52%
    NTPC98,769,600165.11.63%-1.18%
    RAMCOCEM3,901,500754.450.98%-1.05%
    (Increase in price and decrease in open interest)
    Short build-up
    StockCurrent OICMPPrice change (%)OI change (%)
    BAJAJ-AUTO1,937,0003,945.80-2.01%17.84%
    SYNGENE2,362,000573.05-2.84%15.75%
    ASTRAL795,8502,294.05-0.92%11.37%
    CUB8,480,000178.4-0.83%11.32%
    CONCOR5,166,000670.65-0.45%11.01%
    (Decrease in price and increase in open interest)
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
    arrow down

      Most Read

      Market Movers

      View All
      CompanyPriceChng%Chng