Nifty50 may retest resistance at 17,260 soon, but volatility will continue

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Trade setup for Monday, October 17: Nifty50 may attempt to clear resistance at 17,260 in the near term, but high volatility cannot be ruled out, experts say. Here’s what the technical charts suggest.

India’s equity benchmarks ended more than 1% higher on Friday, led by broad-based buying, as a short hedging move in the United States the night before sent a positive signal to global markets.

The surge came even as searing US inflation cemented fears of sharp rate hikes hampering economic growth.

What do the graphs suggest for Dalal Street?

The Nifty50 formed a long negative candle on the daily chart after opening higher, reflecting an unsuccessful attempt to break out of the 17,260 resistance zone, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

High volatility can be expected to continue in the market with immediate support at 16,800, he said.

Nifty Bank ready for higher levels

A sustained move above the crucial 39,600 level for the banking index, after recovering its 50-day simple moving average last week, confirm a bullish cut-and-handle pattern on the hourly chart, which could fuel a rally towards the 40,000-40,800 band, Sameet Chavan, chief technical and derivatives analyst at Angel One, said CNBCTV18.com.

We can expect strong support for the bullish intraday gap around the Area 38,700-39,000, he said. “We remain bullish and therefore traders should use intra-week dips as a buying opportunity.”

Here are the key things to know about the market ahead of the October 17 session:

Wall Street indices fell on Friday, after the previous session’s short hedging, as worsening inflation expectations kept fears intact that the Fed’s aggressive rate hike path could trigger a recession. The S&P 500 fell 2.4%, the Dow Jones 1.3% and the Nasdaq Composite 3.1%.

Earlier in the day, European stocks rose after the UK government’s U-turn on tax cuts, but ended the day at intraday highs on continued uncertainty over its fiscal stance. The pan-European Stoxx 600 index ended up 0.6%.

What to expect on Dalal Street?

HDFC Securities’ Shetti believes Friday’s move could be followed by another move higher.

“A sustained move above 17,260 could pull the Nifty towards the next important resistance at around 17,425 with immediate support around the 17,100-17,050 levels,” he said.

Major Moving Averages

The Nifty50 is more than one percent below its long-term moving average in a bearish sign.

Period (Nb of sessions) Simple moving average
Nifty50 Clever bank
5 17,249.3 39,406.1
ten 17,214.8 39,236.8
20 17,135.3 39,035.4
50 17,169.2 39,004.1
100 17,108.4 38,714.1
200 17,407.9 39,665

Main levels to monitor

The maximum call open interest is accrued at the strike price of 18,000, with 1.3 lakh contracts, and the next highest at 17,500, with 1.1 lakh contracts, according to data. temporary exchange. The maximum open interest to sell is placed at 16,500, with more than 67,000 contracts, and at 17,000, with around 61,000.

This suggests an immediate hurdle at 17,500 and immediate support at 17,000 followed by a strong base at 16,500.

FII/DII activity

Foreign institutional investors (FIIs) remained net sellers of Indian stocks for the sixth straight session on Friday, according to preliminary trading data.

Here are five stocks that have seen an increase in open interest as well as price:

Store Current IO CPM Price change (%) Change in OI (%)
LION CUB 6,340,000 183.5 0.99% 11.83%
NAV INFLUENCER 508,950 4,613.05 0.14% 11.72%
MGL 2,793,600 815.75 4.09% 11.66%
FEDERALLBNK 91,810,000 131.15 5% 10.06%
COFORGE 722,700 3,605 0.98% 6.33%

Long relaxation

Store Current IO CPM Price change (%) Change in OI (%)
AMARAJABAT 5,673,000 490.45 -0.30% -8.51%
WIPRO 42,788,000 377.5 -0.41% -5.02%
AARTIIND 2,830,500 782.7 -0.17% -4.32%
ZEEL 95,517,000 267.5 -2.21% -4.23%
DELTACORP 17,229,300 210.5 -1.73% -3.66%

(Increase in price and decrease in open interest)

Store Current IO CPM Price change (%) Change in OI (%)
LTTS 938,800 3,606 2.04% -11.72%
INFI 42,264,000 1,464.90 3.97% -8.54%
AUBANQUE 6,561,000 598.5 2.80% -6.97%
M&MFIN 19,120,000 207.7 0.92% -6.63%
MINDTREE 2,667,000 3,394.70 2.16% -6.43%

(Increase in price and decrease in open interest)

Store Current IO CPM Price change (%) Change in OI (%)
MFSL 1,422,200 719.25 -3.05% 64.76%
JKCEMENT 343,750 2,475.20 -1.25% 13.16%
COROMANDEL 984 200 968.65 -0.36% 12.87%
ESCORTS 1,051,050 1,967 -1.85% 9.21%
BAJAJ-AUTO 2,046,250 3,566.10 -1.16% 6.52%

(Decrease in price and increase in open interest)

A total of nine stocks from the BSE 500 universe – the exchange’s broadest index – broke through: TVS Motor, Sun Pharma, RITES, IDFC, IDFC First, Federal Bank, KRBL, Kalyan Jewelers and Ratnamani Metals & Tubes.

Thirteen stocks hit their lowest level in 52 weeks:

ALOKTEXT JCHAC BZR POLICY WIPRO
APLTD MASTEK SANOFI
BIOCON MFSL SHILPAMED
HINDPETRO NYKAA SUVENPHAR

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